Help to Buy is saving Millennials thousands in rent
Monday, 7 January 2019 | Admin
Help to Buy schemes were given an extension to 2023 in the recent budget. And this is good news for Millennials looking to move from rental accommodation into their own home as it could help them move quicker and save thousands of pounds in additional rent.
New research (Compare My Move) looked at how long it was taking first-time buyers across the UK to save a deposit for their first home.
The study found that, on average, Help to Buy is allowing first-time-buyers to get on the property ladder two years earlier.
According to the data, saving the required 5% deposit needed for the Help to Buy Equity Loan scheme takes 12 months for the average renter. However, while the study looked at fifty British towns and cities, this timescale is only possible in fourteen of Britain’s largest towns and cities.
In comparison, securing a required 15% deposit, takes approximately three years. Although in some areas - where rent outstrips the national average - it could take over seventeen years without outside help.
As an example, the study found that young renters in London typically take more than ten years to save up the 15% deposit needed for their first home. But these renters can save seven of these years by saving through the Help to Buy scheme.
At the same time, the average first-time buyer in Burnley can save a 5% deposit in just seven months with Help to Buy, or one year and nine months for a 15% deposit.
What is universally true is that many young renters are struggling to raise the deposit needed to buy their first home. But using Help to Buy can speed up the process and therefore help Millennials to save thousands in rent.
Unlike the previous generation, Millennials face a difficult time saving for a deposit for their first home especially when you consider high rental prices and living costs, as well as higher-than-average house prices.
However, Help to Buy can help savers to get on the ladder much faster. In some places with low house prices and rent costs, the average first-time buyer can save the 5% deposit needed for Help to Buy in less than a year. It’s no wonder therefore that the scheme is being hailed as an important catalyst for getting renters on the property ladder.