With UK house prices rising faster than wage growth, and recent findings from the Resolution Foundation predicting that one in three 20-to-35s will never own their own home, the outlook for those saving for a housing deposit does not look bright. New research has found that this is hitting those in the services industry especially hard, and for some it may take more than 100 years to save for a deposit.
Housesimple.com compiled a list of 30 jobs which, based on their average salaries using ONS Annual Salaries data, would see employees have to save for over 100 years to afford a housing deposit.
Jobs where it takes over a century to save for a housing deposit
The research found that for jobs earning less than £17,000 a year, such as waiters and waitresses, teaching assistants and beauticians, it could take a century or longer to save enough for a housing deposit.
According to the online estate agent, without substantial financial help, full-time bar staff on an average annual salary of £14,390 would have to save for 128.2 years to get onto the housing ladder.
This is based on a deposit for a £226,351 property, the price of an average home in the UK according to the Land Registry, and the assumption that the employee would put aside 10% of their net salary every year to go towards this. It is also calculated by looking at the maximum mortgage loan they could secure.
The next longest was hairdressers and barbers who, on an average salary of £14,673, would need to save for 125.5 years.
Even for those earning three thousand more annually, such as street cleaners on £17,887, it would take 99.7 years.
Housesimple.com also looked at those in the emergency services sector, and found that it would take a nurse, on an average salary of £31,867, just under 40 years to save the deposit for an average property, firefighter 34.5 years, primary school teacher 31.5 years, paramedic 28.4 years and a police officer 20.2 years.
Regional variations in time to save housing deposits
The research also looks at regional differences in the time it would take to save for a deposit. In the North East, where the average house price is £128,680, it would take bar staff 54 years to have enough saved for a deposit. While in London, where the average price is £478,853, bar staff would have to save for an eye-watering 320 years to afford to buy an average property.
New research from Hamptons International has shown that regional differences in house prices are driving people out of the capital, with a record number choosing to relocate to the North or the Midlands as a result.
What is clear from the research is that saving for a deposit is unobtainable for many on lower incomes without substantial financial assistance. CEO of Housesimple.com Sam Mitchell believes that even with the help of deposit schemes, many will struggle due to low wages:
“Clearly, no-one is going to be saving for 100 years to buy a property, but these illustrative figures do provide a stark picture of the struggle many buyers working in low paying, but essential jobs, face when it comes to buying a home.
“But what about those people who are working as cleaners, cooks, hairdressers, in parts of the country such as London and the south, where house prices have boomed since 2008? These services are still essential, but the wages don’t reflect the higher cost of living. For many of these people, they are either looking at a lifetime of renting or relying on help from family members to even consider getting a foot on the ladder.”
This comes after the Housing and Finance Institute urged that young people should be offered government loans to help them afford housing deposits and tackle reduced home ownership.