Rising home costs go away first-time patrons chasing transferring goal
The dream of homeownership is slipping further away from Britain‘s first-time buyers just as they think they are about to reach it, new data shows.
Analysis from wealth management platform Moneybox suggests that rising house prices are adding an extra nine months to the time it takes the average buyer to save for a deposit, even when they are putting away money consistently every month.
According to the analysis of Office for National Statistics (ONS) data, a typical first-time buyer earning the average UK salary in 2021 and saving 20 per cent of their monthly take-home pay would have expected to accumulate a 10 per cent deposit for the average-priced home within four and a half years.
However, by the time they reached that savings target in 2025, the price of the same property would have risen from £228,000 to £265,250.
Instead of being ready to buy, they would find themselves £3,541 short of the deposit required, forcing them to save for an additional nine months simply to catch up with house price inflation.
The research illustrates what Moneybox has dubbed the “moving finish line” – the way rising property values continue to push ownership further out of reach, even for disciplined savers.
The modelling assumes a buyer earning the average annual salary of £29,460 in January 2021, saving 20 per cent of their net income into an account paying 2 per cent annual interest. It also factors in average wage growth of 5.31 per cent a year alongside house price inflation of 3.42 per cent annually, based on ONS data.
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While the assumptions represent a relatively optimistic scenario, Moneybox warns that many buyers will face an even steeper challenge if they earn less, save smaller amounts, receive lower interest on their savings or are hoping to buy in more expensive parts of the country.
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The impact becomes even more pronounced for those targeting higher-value homes. Someone hoping to purchase a £300,000 property in 2021 would initially have expected to save for around five years and eight months.
But by the time they reached that point, the property’s value would have climbed to almost £363,000, leaving them more than £6,000 short of the deposit required and extending their savings journey by a further 14 months.
The findings come despite evidence that first-time buyers are making greater efforts than ever to build deposits.
Moneybox’s survey of 2,000 aspiring first-time buyers found that the average amount saved each month has increased significantly, rising from £344 in 2023 to £475 today.Yet many still feel they are falling behind.
More than seven in ten respondents (71 per cent) said they now expect it will take longer to buy their first home than they originally anticipated.
Buyers now estimate it will take an average of four and a half years to achieve homeownership, compared with an average expectation of 4.2 years just two years ago.
The cost of living remains the biggest obstacle, with 47 per cent of respondents saying higher everyday expenses have slowed their progress. Rising house prices were cited by 39 per cent, while 34 per cent said that paying rent leaves them with too little disposable income to save effectively.
The consequences are forcing many would-be buyers to rethink what homeownership looks like.
Nearly two-thirds (63 per cent) said they had changed their property plans within the past six months. Almost half (48 per cent) have delayed the date they expect to buy, while 29 per cent have accepted that they may need to purchase in a less desirable location.
A further 29 per cent have lowered their expectations around features such as property size, outdoor space or off-street parking in order to make buying more affordable.
Brian Byrnes, head of personal finance at Moneybox, said many first-time buyers remain committed to saving but are becoming increasingly frustrated by the pace at which the market continues to move.
“We speak to first-time buyers every day,” he said. “Most are dedicated to their ambitions and saving habitually, but the frustration is obvious when it feels like the goalposts are constantly shifting. Even with interest rates working in their favour, house price growth is still edging ahead of the average saver.”
He argues that making savings work as efficiently as possible has become increasingly important, pointing to the benefits of using a Lifetime ISA, which offers a 25 per cent government bonus on contributions of up to £4,000 a year.
“The most effective way to outpace the market is to ensure every single pound is working as hard as possible from day one,” Byrnes said. “Utilising a Lifetime ISA gives savers a 25 per cent boost on their savings, meaning up to £1,000 of government support every year to help shrink that deposit gap.”
He also warned that proposals to delay payment of the government bonus until the point of purchase could make the challenge even harder, arguing that savers would lose years of compound growth that currently helps build their deposits over time.
For prospective buyers, the message is one of persistence rather than despair.
House price inflation may be extending the path to homeownership, but experts say regularly reviewing savings goals, maximising returns through tax-efficient products where appropriate and adjusting expectations early can help prevent buyers from falling further behind.
The latest figures underline a difficult reality for a generation hoping to buy their first home: saving the deposit is no longer enough. As house prices continue to rise, many first-time buyers are not simply racing towards the finish line — they are chasing one that keeps moving.
