Market Insight - June/July 2017
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Steaming ahead

Tick tock - Greater availability of higher loan to value mortgages cuts time to save by nearly eight years


It takes an average single buyer nearly 12 years to save a 15% deposit for their first home. That’s a whole year longer than at the end of 2015. But it’s not all bad news. Lenders are increasingly offering higher loan to value mortgages and the rates charged on them have come down more than for any other mortgage type. Taking advantage of Help to Buy or taking out a 90% mortgage means that the time to save a deposit falls substantially. 

In Q4 2016 it would take an average single first-time buyer 11 years and nine months to save a 15% deposit. But reducing the deposit to 10% cuts three and a half years off the saving time to eight years and three months. And saving just 5% cuts over seven off the time to save a deposit meaning it takes just four years to save up. 

Lenders have been a lot happier to offer higher loan to value mortgages which is good news for first-time-buyers. The proportion of loans made at 90% or more was 5% in 2016, up from 3.8% in 2015 and this increasing availability of lending at higher LTVs, combined with lower mortgage rates has improved the ability to buy for first time-buyers. 

For a single buyer in London it still takes 18 years and 3 months to save up for a 15% deposit – that’s six and a half years more than the UK average. The South East and the South West are the second and third areas where it takes the longest time to save for a deposit – 15 years and three months and 14 years and six months respectively. But with interest rates set to remain low for the foreseeable future, borrowing will stay cheap and that’s good news for first-time-buyers. 


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