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Among House price rise, Savings deposits have become a major challenge for many aspiring British first-time homebuyers. Most first-time homebuyers need several years to accumulate enough cash to purchase their first home.
Now, new research shows that female first-time homebuyers may be at a greater disadvantage when it comes to saving for home purchases, and that most people take much longer than men. But why is it so?
Why do female first-time homebuyers take longer to save money to buy a house?
According to a new study from the financial comparison website Compare, The gender wage gap brings economic disadvantages, which makes it necessary for women to spend 51% more time than men to buy their first home.
GoCompare found that it takes an average of 5.5 years for female first-time homebuyers to deposit the down payment. In contrast, it takes 3.7 years for male first-time homebuyers.
This is because the average weekly income of aspiring female buyers is lower than that of men. As a result, their ability to save enough house deposits was severely impaired.
In fact, 58% of aspiring homeowners who can only deposit up to £199 a month as a deposit are women. On the other hand, 19% of men are able to deposit more than £400 a month, compared with 13% of women.
Although the gender wage gap has dominated the headlines in recent years, few people are aware of its impact on potential buyers. Research shows that 74% of homeowners do not know the impact of the gender pay gap on women’s ability to save for their families. This includes 68% of women who do not know that they need to save longer than men to buy a house.
Is there any support for first-time buyers?
The good news for first-time homebuyers struggling with down payment is that there are several government programs that can help them enter the property ladder for a smaller amount.
However, statistics show that only a small percentage of eligible people (27%) use these plans. In fact, men use them more often than women. Although the latter is more difficult to deposit due to the gender pay gap.
One government plan that aspiring first-home buyers should seriously consider is Help to buy: Equity loan program. This program can help you get to the property ladder faster because you only need to pay a 5% down payment. The government will provide loans up to 20% of the house value (40% if in London). The loan is interest-free for the first five years.
Aspiring buyers should also consider Lifetime ISAWith this product, you can save up to £4,000 per year and receive a 25% government bonus (up to a maximum of £1,000) for the purchase of your first home. This bonus need not be repaid.
What other options do first-time homebuyers have?
First-time homebuyers who can bear a little risk can also choose to invest their savings in Stocks and shares ISA To accelerate growth.
Although investing in stocks is inherently riskier and you may get back less funds than you put in, it is possible to get higher returns over time compared to depositing funds in a regular cash savings account.
Just make sure to research before investing and seek professional advice if necessary.
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About the author
Sean is a personal finance writer who is passionate about helping others improve their financial knowledge and make better financial decisions. He covers everything from credit cards to savings to investment.
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