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Wednesday, February 21, 2024
    HomeMoneyHouse prices are falling – so when can I afford to purchase?

    House prices are falling – so when can I afford to purchase?

    Let’s say your ideal property costs £251,500 today and also you’ve got no savings yet. In case you put away £5,000 a 12 months and your savings rate averages 2pc a 12 months and house prices drop 5.2pc every year, it should take you 4 years to get a 10pc deposit, the everyday amount needed for a first-time purchase.

    In the identical scenario, if house prices rise around 2pc every year, it should take you five years and 4 months.

    But what in regards to the Bank of Mum and Dad? So-called gifted deposits have turn into the norm and fogeys would count as a top 10 lender in the event that they were a bank, in line with research from Legal & General.

    Three out of 5 first-time buyers this 12 months are expected to get help from their parents to purchase a house, the best level since 2011, in line with Savills, the estate agents.

    The calculator shows that, using the instance above, with house prices falling 5.2pc every year and your parents supplying you with £9,500 towards a deposit, it should shorten the period of time it takes you to get that 10pc deposit to 2 years and five months.

    Rising savings rates can enable you get to your homeownership goals much more quickly.

    The best easy-access savings rate is 5.2pc, and you’ll be able to currently recover from 6pc if you happen to lock your money away in a top-rate fixed-term account.

    Many members of what has been dubbed “Generation Rent” will likely be unable to step foot on the property ladder until their late 40s, in line with lobby group Generation Rent.

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