
Why It’s So Hard for Young People to Save for Their First Property
For many young adults in the UK, the dream of homeownership feels increasingly out of reach. With property prices continuing to soar and wages barely keeping pace, saving enough for a deposit has become a monumental challenge.
According to the latest figures, the average age of a first-time buyer is now 33 - a sharp rise from 24 in the 1970s. So, what’s driving this delay, and why is it so difficult to get a foot on the ladder?
Property Prices Rising Faster Than Pay
One of the most significant barriers is the disproportionate rise in house prices compared to income.
Over the past two decades, property values have consistently outpaced wage growth, meaning young people must save a far larger portion of their income to afford even a 10% deposit.
In fact, the proportion of young adults needing to save more than six months’ income for a deposit has grown substantially, making homeownership a long-term goal rather than a short-term possibility.
Wages That Just Don’t Stretch Far Enough
Despite the rising cost of living and property prices, wage growth for young adults has remained sluggish.
Entry-level salaries are often low, and many find themselves competing for limited high-paying roles in saturated job markets. Even those with degrees and stable employment face stagnant pay, which makes setting aside money for a deposit extremely difficult.
This has led many young people to look for alternative ways like quick loans to prop up their income. According to MoneyHub, 19% of young people have applied for a personal loan with a further 19% of under 35s applying for a payday loan within this time.
Rent: The Silent Savings Killer
For those not living at home, rent continues to be one of the biggest drains on disposable income. According to the Resolution Foundation, the average time it now takes to save for a deposit is nine years, a figure driven in part by the relentless rise in rental costs.
With so much of their monthly income tied up in rent, transportation, and other essentials, many young adults find themselves unable to build meaningful savings.
Student Loans and Daily Costs Add Up
In addition to rent, many young adults are burdened with student loan repayments and everyday expenses such as food, travel, and utilities.
These financial obligations leave little room to put money aside for future homeownership. In fact, a recent survey by OneFamily found that over 40% of young adults have less than £1,000 in savings, not nearly enough to even begin thinking about a deposit.
Government Help and Alternative Routes
While the situation is bleak, there are some measures designed to help first-time buyers.
Government schemes such as Help to Buy and Shared Ownership have made homeownership more accessible for some, although not without limitations.
Some young buyers are also turning to alternatives like buying with friends or siblings, purchasing smaller or further-out properties, or relying on support from the so-called “Bank of Mum and Dad.”
Family contributions have become increasingly vital in recent years, as many parents try to help their children navigate a near-impossible market.
Stricter Mortgage Requirements
Even for those who manage to save a deposit, getting approved for a mortgage isn’t guaranteed.
Lenders have become more rigorous with affordability checks, often scrutinising applicants' spending habits, credit history, and job security. This can be especially tough for freelancers or those in the gig economy.
A Delayed Start on the Property Ladder
The cumulative effect of these challenges is a later start to homeownership. In 2021, survey participants estimated the average age of a first-time buyer to be around 30, but official data from the Yorkshire Building Society places it even higher at 34 - 33 outside of London. That’s a full decade later than it was in the 1970s.
Side Hustles and Digital Income Streams
For many young adults, one way to build up savings faster is to explore new income streams.
From freelancing to affiliate marketing, there are now more ways than ever to make money online. While not a guaranteed fix, a flexible side hustle can help supplement traditional income, giving young people a better shot at saving for that all-important deposit.
The Way Forward
If young people are to have any chance of owning a home in the future, early saving will be important, even if the amount set aside is small.
But saving alone isn’t enough. A meaningful solution will likely require broader structural changes: affordable housing supply, wage growth, and improved access to mortgages.
Until then, the journey onto the property ladder remains one of the toughest financial challenges facing young adults in the UK today.