First Time Buyer Deposit Shortfall

Aspiring first time buyers have an unrealistic expectation of how much they need to save in order to reach the ideal deposit, according to a new report.

Figures from Alliance and Leicester Mortgages reveal that with the average first property price being around £135,000, buyers should be aiming to save a deposit of nearly £12,0000 (about eight per cent).

However, most buyers are only planning to save £270 a month for two years, facing a deposit shortfall of over £5,000 from the ideal target.

In fact, first time buyers would need to put aside almost double the amount (eg £500 a month) or save for longer (three and a half years).

"There is a clear mismatch between how much, and for how long first time buyers are willing to save, and their ideal target deposit to buy their first property," explained Richard Taylor from Alliance & Leicester.

"To turn dreams into reality it's a good idea to plan and budget carefully – trying to cut back on luxury expenditure, like takeaways and expensive nights out, will all help to achieve their dream more quickly."

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