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The buy to let investment property sector is only likely to strengthen, as the time it takes to save a new build property deposit lengthens.
The latest research by new home specialists, Stone Real Estate, has looked at just how long it will take to earn the equivalent of a 15 per cent mortgage deposit for a new build home based on the daily wage at several different salary brackets.
They looked at the net earnings per day for various salary levels since the year began and at what point this year or next, these earnings would have reached £43,975, the average 15 per cent deposit for a new build home (£293,167).
The data shows that only for those on a wage of £1.2m or above would the minor sum of £43,975 have been in the bag since yesterday, just 26 days into the new year.
However, spare a thought for those buying in London where the average new build cost is £502,228 and a 15 per cent deposit equates to £75,335, as they would have to be on a wage of £2.1m or above to hit the threshold as of yesterday.
In contrast, those just starting out on a wage of £20,000, would have to work for 937 days, 912 days more, just to hit a 15 per cent mortgage deposit on the average new build home, meaning they won’t reach the same point until 26th July 2022!
This is again higher in London, where it would require someone on £20,000 to work for 1,604 days or until 23rd May 2024 just to earn the required deposit of £75,334. Raking in £50k a year? You would still have to work until 4th March next year (428 days) or 3rd January 2022 in the capital.
£70,000 a year and up is needed to save the average UK new build deposit before 2020 is out, taking 241 days on a £100k salary.
In London, you need to be earning £200k to make the cut by August of this year (235 days), while £500k will see you reach the sum in just 100 days!
Founder and CEO of Stone Real Estate, Michael Stone, commented: ‘For many aspirational homebuyers across the UK and particularly in London, the financial hurdle of compiling that all-important mortgage deposit is huge and it can take them years of saving in order to get to that point.
‘Of course, life makes it impossible to save 100 per cent of our income and while it may take you even longer tucking away 20 per cent of your net income, doing so will soon provide you with a very firm foundation.’