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. Research carried out as part of Aviva’s ‘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.
- Under-45s say becoming a homeowner will become more important in next 20 years
- Though younger age groups are resigned to longer path to property ownership
- Four in five agree homeownership is more important in UK than elsewhere
- Yet 10 million UK adults do not have home contents cover
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)1. Although in some areas of the country, the monthly savings would be significantly higher as the table below shows:
| Region | Average cost first-time buyer home | Monthly savings for 10% deposit over four years and four months (to nearest £) | Monthly savings for 5% deposit over four years and four months (to nearest £) |
| Great Britain | £180,677 | £347 | £174 |
| North East | £107,238 | £206 | £103 |
| North West | £125,400 | £241 | £121 |
| Yorkshire and Humber | £128,583 | £247 | £124 |
| East Midlands | £144,682 | £278 | £139 |
| West Midlands | £138,535 | £266 | £133 |
| East | £225,874 | £434 | £217 |
| London | £412,474 | £793 | £397 |
| South East | £248,129 | £477 | £239 |
| South West | £194,304 | £374 | £187 |
| Wales | £126,000 | £242 | £121 |
| Scotland | £115,877 | £223 | £111 |
Homeownership goal expected to grow in popularity
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% of 16-24s and 60% of 25-34s saying homeownership will grow in importance, compared to just 40% 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
| Importance of becoming a homeowner in 20 years’ time | All | 16-24 | 25-34 | 35-44 | 45-54 | 55+ |
| More important | 51% | 73% | 60% | 50% | 44% | 40% |
| Less important | 49% | 27% | 40% | 50% | 56% | 60% |
Younger age groups prepared to wait to get on the property ladder
Four out of five people (81%) 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%) 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%) say they want or wanted to become a homeowner as quickly as possible compared to 43% of 25-34s (a key first-time buyer age group) and while only a quarter (24%) 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%) 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%) or 10 million2 UK adults do not have contents insurance, rising to one in three (33%) people in rental accommodation.
Of further concern is that 40% 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%) people do not know how much their possessions and valuables are worth, potentially resulting in being under or over-insured.
Confusion around the need and value of contents insurance
| Percentage | |
| Do not have contents insurance | 19% |
| Have this insurance but do not know the value | 40% |
| Do not know the value of the contents in their home | 62% |
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.”
Ends
If you are a journalist and would like further information, please contact:
Aviva Press Office: Sarah Poulter, 01904 452 828, sarah.poulter@aviva.com
Instinctif Partners: Rachel Morrod, 0207 427 1431, rachel.morrod@instinctif.com
Methodology: All figures based on a nationally representative survey of 2,000 UK adults aged 16 and over, carried out by Censuswide in Q2 2016.
Comparisons between homeowners and non-homeowners saving for house deposits are based on 890 non-homeowners and 1,111 homeowners across the UK.
1 First-time buyer house prices from the official UK House Price Index (June 2016)
2 Population aged 16 and over is 52,443,290. 19% = 9,964,225. Population estimate from ONS table MYE2: Population Estimates by single year of age and sex for local authorities in the UK, mid-2014.
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