Would-be homeowners expect to save four years for first home deposit - Aviva
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Aspiring homeowners believe they will need to save for more than four years in order to afford a deposit for their first home, research from Aviva reveals today.
Aviva, which employs about 1,300 staff at its hub in Perth, carried out the research as part of its ‘Home’ report series showed that UK adults who want to buy a home expect to save for four years and four months on average, in order to build up an adequate deposit. However, one in four (27%) non-homeowners believe that they will never be in a position to buy their own property.
In contrast, homeowners over the age of 55 said that saving for their first home took just over half the time – two years and eight months.
Official figures show that the typical first-time buyer home in Britain now costs £180,677. In order to save a 10% deposit, aspiring homeowners starting from scratch would need to save £347 a month to build this deposit in four years and four months (assuming no interest growth). Although in some areas of the country, the monthly savings would be significantly higher as the table below shows:
Despite property ownership becoming more difficult as UK house prices rise, under-45s believe homeownership will only become more important in the next 20 years, according to Aviva’s Changing Households report.
However, a clear distinction emerges between different age groups, with 73 per cent of 16-24s and 60 per cent of 25-34s saying homeownership will grow in importance, compared to just 40 per cent of over 55s. As younger age groups are the next generation of potential homeowners, it is clear that the desire to be a homeowner will continue to be very significant.
Importance of becoming a homeowner in 20 years’ time
Four out of five people (81 per cent) say that homeownership is perceived as a more important milestone in the UK than other parts of the world. On a personal level, over three quarters (79 per cent) of people in the UK agree becoming a homeowner is important to them (or was, if they already are homeowners).
However, younger generations appear to accept that the path to homeownership might require some patience. Half of over-55s (53 per cent) say they want or wanted to become a homeowner as quickly as possible compared to 43 per cent of 25-34s (a key first-time buyer age group) and while only a quarter (24 per cent) of over-55s say they don’t or didn’t mind waiting a while to become a homeowner, this rises to two in five (40 per cent) 25-34s.
10 million people do not have contents insurance
Despite the importance of getting on the property ladder, many people are failing to protect their possessions as one in five (19 per cent) or 10 million2 UK adults do not have contents insurance, rising to one in three (33 per cent) people in rental accommodation.
Of further concern is that 40 per cent of people don’t know the value of their contents insurance, leaving them at risk of being inadequately covered. In addition, more than three in five (62 per cent) people do not know how much their possessions and valuables are worth, potentially resulting in being under or over-insured.
Lindsey Rix, managing director, personal lines - Aviva UK & Ireland General Insurance at Aviva, said: “The UK’s households are changing, not just as the population grows, but as society evolves to include more family types. However, one thing remains constant – our desire to get on the property ladder. The next generation of homeowners are certain this will only become more important.
“Given the value attached to owning a property, it makes sense to protect what’s inside it, yet millions of UK adults do not have any contents cover. Just taking out any policy won’t be enough to ensure you are properly protected though. It’s worth going through each room and checking the value of your belongings so you’ve got an accurate idea of the value of your contents and cover that matches this figure.”
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