Aspiring home owners in the UK believe they will need to save for more than four years in order to afford a deposit for their first home, new research has found.
While most will safe for four years and four months some 27% believe that they will never be in a position to buy their own property, according to the report from insurance firm Aviva.
Official figures show that the typical first time buyer home in Britain now costs £180,677. In order to save a 10% deposit, aspiring home owners starting from scratch would need to save £347 a month to build this deposit in four years and four months, assuming no interest growth.
Despite property ownership becoming more difficult as UK house prices rise, under 45s believe home ownership will only become more important in the next 20 years, the report found.
However, a clear distinction emerges between different age groups, with 73% of 16 to 24 year old and 60% of 25 to 34 year olds saying home ownership 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.
Younger age groups are prepared to wait to get on the property ladder. Some 81% say that home ownership is perceived as a more important milestone in the UK than other parts of the world. On a personal level, 79% of people in the UK agree becoming a home owner is important to them or was, if they already are home owners.
However, younger generations appear to accept that the path to home ownership might require some patience. Some 53% of over 55s say they want or wanted to become a homeowner as quickly as possible compared to 43% of 25 to 34 year olds, a key first time buyer age group. While 24% of over 55s say they don’t or didn’t mind waiting a while to become a home owner, this rises to 40% for 25 to 34 year olds.
Despite the importance of getting on the property ladder, many people are failing to protect their possessions as 19% or 10 million UK adults do not have contents insurance if they own a home and 33% of those renting.
The research also found that 40% of people don’t know the value of their contents insurance, leaving them at risk of being inadequately covered. In addition, 62% do not know how much their possessions and valuables are worth, potentially resulting in being under or over insured.
‘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 and that is our desire to get on the property ladder. The next generation of home owners are certain this will only become more important,’ said Lindsey Rix, managing director, Personal Lines Aviva UK & Ireland.
‘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,’ added Rix.