How long it will take you to save for a home deposit depending on your salary
LEVEL UP How long it will take you to save for a home deposit depending on your salary
SAVING up for a house deposit if you're earning an average annual salary of £37,000 could take 12 years, but there are ways to fast-track becoming a first-time buyer.
With lending rules easing, a mortgage rate summer price war and an interest rate cut looming, experts say now is a good time to get on the property ladder.
Lucy Andrews and Emiy Mee explain everything you need to know.
WHAT IS HAPPENING TO THE PROPERTY MARKET
In March, strict lending rules about how much buyers can borrow, called the 'stress test', were eased by the city watchdog, the Financial Conduct Authority.
This made it easier for banks to lend more money to buyers.
Since then a price war has broken out among lenders, triggering a flurry of cheaper mortgage deals.
Banking giants including Barclays, Nationwide, Halifax and HSBC slashed rates this week, and there are now 65 deals offering fixed rates below four per cent.
Even better, rates could fall even further from next month with a drop to the Bank of England base rate widely anticipated.
HOW LONG IT COULD TAKE TO SAVE
This depends on how much you earn and can put aside, who you're buying with and the price of the property.
The average house price is £265,497, so a ten per cent deposit would be £26,549.
If you earn the average salary of £37,000 a year, and save five per cent of it (£1,850pa) in a three per cent savings account, it would take 12 years, according to numbers crunched by Hargreaves Lansdown for Sun Money.
That's down from 2020, when it would have taken 13 years to save when the average salary was £31k and the average house price was £228,446.
Mortgage help ends TODAY and more hot water info released
TAKE A SAVINGS SHORTCUT
There are a number of ways you can accelerate your path to becoming a homeowner.
BANK OF MUM AND DAD
If your parents are lucky enough to have savings then they might be willing to give you some cash to put towards a deposit.
The Bank of Mum and Dad handed down £9.6billion in 2024, according to estate agent Savills.
Parents can still help, even if they don't have cash to spare.
They can list their income on the mortgage to boost the amount their child can borrow on guarantor mortgages.
Their savings or home will be used as collateral against their child's mortgage application.
'These mortgages are really popular,' said Harry Arnold from the broker Anderson Harris.
Beware, parents will have to foot the monthly mortgage bill if the kids can't keep up with payments.
THE BANK ACCOUNT TO OPEN
Push your savings further by opening a Lifetime Isa.
These are generous tax-free savings accounts designed for first-time buyers or saving for retirement.
The Government boosts your savings by an extra 25 per cent.
You can put in £4,000 a year (which is a whopping 10.8 per cent of a £37,000 salary), which means a maximum bonus of £1,000 per year.
However, even if you can't put the maximum in a Lifetime ISA, and put in five per cent of a £37,000 salary (£1,850pa) you would be able to buy in ten years — two years quicker than saving without one.
If you were able to save the maximum £4,000 plus £1,000 bonus, it would take you about five years.
'The Lifetime Isa is a brilliant way to turbo boost your savings, and gets you a step closer to owning your first home,' said Sarah Coles from Hargreaves Lansdown.
The value of the house must be £450,000 or below, and you will only be able to withdraw money from your account after 12 months of opening it to qualify for the bonus.
Otherwise you pay a nasty 25 per cent penalty.
NO-DEPOSIT MORTGAGES
Some lenders offer no-deposit mortgages, also known as 100 per cent track record mortgages.
These are controversial, partly because they were seen to fuel the 2008 financial crisis, but also because they often have higher rates and there is a much higher chance of you falling into negative equity.
'These mortgages may not be a solution for everyone,' said David Hollingworth from the broker L&C Mortgages.
'Do your research carefully and get advice.'
SCHEMES TO CHECK
Keep an eye out for the reboot of the mortgage guarantee scheme.
It closed last month, but the Government has promised it will launch a new version soon.
Lenders who signed up were offering mortgages where you only need a five per cent deposit.
The First Homes scheme, which gives a discount of 30 to 50 per cent off a new-build home, is also worth considering.
Your income must be £80,000 or less.
You'll need to be able to get a mortgage for at least half the price of the home.
Shared ownership — where you own a smaller percentage of the property and rent the rest — is popular too.
But it has drawbacks, such as rising service charges and fees.
Often it's available on new-build properties, which suffer from lower house-price growth.
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There are ways to fast-track becoming a first-time buyer
YOUR RIGHTS ON CANCELLED FLIGHTS
TENS of thousands of holidaymakers who have seen their getaways ruined by flight cancellations this week have been urged to check their refund rights.
As many as 36,000 passengers saw their flights cancelled this week due to strikes over working conditions and pay.
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What are your rights if your flight is cancelled?
Credit: AP
EasyJet, Ryanair and AirFrance customers were affected.
Ryanair also warned of record flight delays this summer.
So what are your rights?
GET A REFUND: If your flight takes off or lands in the UK or EU, you are covered by rules that mean you can get a refund and compensation.
Connecting flights are covered, but you must have booked all legs of the journey at the same time. Affected passengers will be legally entitled to a full refund or a replacement flight.
Airlines don't have to give you a refund if the flight was cancelled due to reasons beyond their control, such as extreme weather.
'Passengers should also be provided free refreshments or accommodation, if appropriate to the length of the delay,' said Rory Borland from the consumer site Which?.
If you fork out for anything yourself, keep the receipts in a safe place and claim the money back from your airline. Ask your airline for details about how to make a claim for a refund.
CLAIM COMPENSATION: If the airline cancelled less than 14 days before departure, or your replacement flight means you arrive at least two hours late to your destination, you could get compensation.
How much you could receive will depend on the distance of your flight and the length of delay, but it could be worth between £110 and £520.
You'll get the maximum amount if the flight distance is more than 3,500km and you arrive at least four hours after your booked flight should have arrived.
Check the Citizens Advice website (citizensadvice.org.uk), which gives a compensation breakdown for all events.
Contact your airline and ask how to make a claim for compensation.
You have six years to make a claim, but don't delay – do it quickly before you forget.
Write down what happened and provide any evidence, such as receipts.
If your flight doesn't begin or end in the UK or EU, check the terms and conditions of the airline's policy. The compensation you receive will depend on the rules in the country the airline is based.
HAVING TROUBLE? If you've made a claim for compensation and your airline isn't playing ball, you can complain.
Check if the airline is a member of an alternative dispute resolution scheme. You can do this by visiting the Civil Aviation Authority website and searching your airline's name.
If it's not part of an alternative dispute resolution scheme, complain to the Civil Aviation Authority.
LUCY ANDREW
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