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Wannabe buyers put off saving a deposit

Wannabe buyers put off saving a deposit

Category: Mortgages

Updated: 01/08/2011
First Published: 01/08/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

While the overwhelming majority of Britons profess to aspire to home ownership, very few are actually making an effort to save for a deposit.

People in the UK have long considered owning their own home as one of their main priorities, with figures showing that more than three quarters of people that do not currently own want to do so in the future.

However, research by Halifax has shown that only 14% of people are saving and making sacrifices to make their home ownership dreams a reality.

Of those who are cutting back in a bid to save, a third said they had cut down or stopped going out (34%), and a quarter said they went on fewer or cheaper holidays (25%), or spent less on clothes, toiletries or personal grooming (24%).

"We know from our own research that for some customers to get on to the ladder, their savings behaviours need to change," Simon Kenyon, Halifax savings director, commented.

"There are numerous costs in that first month of homeownership, whether it is setting up an internet connection, buying new furniture, or paying council tax."

A number of new products have been launched for first time buyers in recent months, particularly from some of the smaller players in the market.

There have even been a few deals launched for buyers with just a 5% deposit, something that dried up at the height of the economic downturn.

Both the Government and housing bodies have called on lenders to design and offer more innovative products for first time buyers, with Lloyds Lend a Hand and mortgages guaranteed by parents and family prime examples.

Halifax has made its intentions clear by announcing it is to launch a savings account for potential first time buyers.

The deal requires holders to increase their balance for ten out of 12 months and, if they take a first time buyer mortgage, a £600 payment will be added to the account from which they can pay their mortgage.

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