The Locked Out Generation: ‘Time to Save a Deposit for a Home Triples In a Decade’

11 Feb, 2013

However, signs of thaw in mortgage market and lifeline from Government backed schemes providing optimism

Saving a deposit will now take 10 years across EnglandIn London it will take 24 yearsTime taken to save has tripled in past decadeFirst time buyer numbers have plummeted by 64% in 10 years


Funding for Lending Scheme is increasing lendingGovernment backed Newbuy and Firstbuy schemes are helping more families get on to the property ladder

New research released today reveals the scale of the challenge faced by young people wishing to buy a home – and how much the situation has deteriorated in the last decade.

However, there is some hope emerging for people looking to buy. The Government’s Funding for Lending scheme has resulted in some thawing in the mortgage market and Government-backed schemes such as Newbuy and Firstbuy are providing a lifeline for an increasing number of people who would otherwise be excluded from home ownership.

On average across England, without assistance from a Government scheme or other help, somebody in their 20s wanting to purchase the average first time buyer home (£175,265) would have to save a deposit of £35,053. Even saving 33% of their net income it would take them nearly seven years – 83 months - to put together the necessary deposit. In 2002, a person in the same circumstances would have saved a deposit in 2.5 years.

The reality is even harsher. When you factor in the costs of paying rent, utility bills and council tax while trying to save a deposit, the scale of the challenge faced by today’s young people becomes apparent. For potential first time buyers in their twenties saving half of their discretionary net income (that is, net income after paying council tax, rent, energy and water bills) it will take on average across England more than 10 years to put together a deposit for their first home, and in London an astonishing 24 years.

This increasing ‘deposit gap’ has seen the number of FTBs plummet, creating a Locked-out Generation. In the five years to 2002 the number of first time buyers averaged 543,000 each year. In the last five years to 2012 that number has collapsed to 197,000.  

The figures are revealed in HBF’s latest Broken Ladder report – ‘The Locked-out Generation - A decade of decline and the deposit gap’. It is the third such report to be published and identifies the increasing lack of accessibility to the housing market at a time when supply is critically low.

Newbuy, allows people to buy a new build home with a 5% deposit. This cuts the average FTB deposit to a more realistic £8,763. More than 3,000 people have reserved a home through NewBuy already and the first few weeks of 2013 have seen a big increase in the weekly number of reservations as more people become aware of the scheme and, crucially, lenders have cut the interest rates they are offering for the scheme.

FirstBuy, the Gvmnt/Industry funded shared equity scheme that also allows people to buy with a 5% deposit had helped over 10,000 before running out of funds. After pressure from the HBF, and realising its critical importance, Government has extended the scheme deadline and allocated further funds that will help an additional 16,500 people buy their own home.

Stewart Baseley, HBF Executive Chairman, said today:

“This report reveals the extent of our housing crisis and the challenge faced by today’s young people. Unlike previous generations that took home ownership for granted, today’s generation have a mountain to climb if they wish to own their own home. We are creating a locked out generation.

“However, there is some light at the end of the tunnel and there are now several ways for people to buy with a more normal deposit. Government backed schemes such as Newbuy are offering real options for people looking to buy – or move home – and we are seeing more and more take advantage.”

For media enquiries, or to arrange an interview, please contact Steve Turner on 020 7960 1606 / 07919 307 760 or

Notes to Editors:

1.     The Home Builders Federation (HBF) is the representative body of the home building industry in England and Wales. The HBF’s 300 member firms account for some 80% of all new homes built in England and Wales in any one year, and include companies of all sizes, ranging from multi-national, household names through regionally based businesses to small local companies:

broken ladder 3 - the locked out generation

PDF - 651.2 KB