NATIONWIDE has revealed it takes nine years to save for a deposit for first-time buyers in London as experts warn that this means “buying without family help remains nearly impossible”.
Nationwide’s Housing Affordability Report says there has been continued improvement in affordability which helped support first-time buyer activity over 2025.
Affordability was most stretched in London and South of England, while North and Scotland are the most affordable, the report says.
A 10% deposit on typical UK first-time buyer property is around £23k – this would take nearly six years to save. But that goes up to nine years for people buying in London.
This comes as Nationwide revealed house prices fell unexpectedly in December.
Affordability constraints have eased
Commenting on the figures, Andrew Harvey, Nationwide’s Senior Economist, said: “With price growth well below the rate of earnings growth and a steady decline in mortgage rates, affordability constraints have eased somewhat over the past year, helping to underpin buyer demand.
“Indeed, the first-time buyer share of house purchase activity was above the long run average, supported by easier credit availability, with the share of high loan-to-value lending (i.e. with a deposit of 15% or less) reaching its highest level for over a decade. First-time buyer activity over the last year was around 20% higher than 2024 levels.
“Our main affordability benchmark shows that a prospective buyer earning the average UK income and buying a typical first-time buyer property with a 20% deposit would have a monthly mortgage payment equivalent to 32% of their take-home pay – slightly above the long-run average of 30% and well below the recent high of 48% recorded in 1989.
“There has also been an improvement in the first-time buyer (FTB) house price to earnings ratio (HPER) to 4.7. This is a continuation of the trend seen over recent years, with the ratio now slightly below its 20-year average. Consequently, this suggests it is a little easier for prospective buyers to save for a deposit, although it is still particularly challenging for those in the private rented sector, given rental increases in recent years.
“Indeed, a 10% deposit on a typical UK first-time buyer property is around £23,000. Even based on saving 10% of average net pay (c. £320) per month it would take a prospective buyer nearly six years to accumulate this. However, the level of deposit required also varies considerably by region, reflecting differences in average house prices. For example, a 10% deposit in London is over three times larger than the equivalent in the North. It would also take a Londoner nine years to save for their deposit versus around four years for someone buying in the North, based on saving 10% of their average net pay.”
First-time buyers struggle
Elliott Culley, Director at Hayling Island-based Switch Mortgage Finance, said there are still many barriers to people getting on the housing ladder.
He added: “Mortgage affordability and borrowing capacity has been strong for a considerable amount of time, the main issue for first-time buyers is the large deposit required to take that first step on the housing ladder.
“Mortgage lenders have been keen to increase borrowing capacity as much as possible and this has led to borrowers being able to lend far more than used to be the case. However, data from Nationwide is suggesting a deposit for an average property price in the UK which takes six years to build and that figure increases to nine years if looking for a property in London.
“This is before you take into account potential stamp duty that will also be due for first-time buyers if you purchase above £300,000. The mortgage market is struggling as first-time buyers struggle to build the deposits required, so as much as improved affordability for borrower’s is welcome, without support on deposits, it only solves half the problem.”
Ross Lacey, Director & Independent Financial Adviser at Rayleigh-based Fairview Financial Management, said he is seeing more first-time buyers join the market.
He continued: “We’re seeing increased activity from first-time buyers. Fixed rates falling, schemes like the Lifetime ISA, and higher income multiples being offered by lenders for first time buyers have all contributed to making things easier to get on the property ladder.”
Buying without family help remains nearly impossible
But Darryl Dhoffer, Founder at Bedford-based The Mortgage Geezer, said buying without family help “remains nearly impossible”.
He added: “Nationwide’s report reveals a healing but divided market. With wage growth finally outpacing house prices, affordability is improving, bringing the price-to-earnings ratio down to 4.7.
“FTBs are back – activity is up 20% on 2024. This is vital. FTBs are the engine that allows ‘second-steppers’ to move. Banks are fueling this with the highest level of low-deposit lending in a decade.
“While monthly payments are manageable (32% of pay), the £23k deposit hurdle remains brutal. The ‘6-year’ average wait (nine years in London vs four in the North) assumes renters can spare £320 a month. For many in the South, buying without family help remains nearly impossible, while the North offers a far more realistic path.”
Kundan Bhaduri, Entrepreneur, Investor and Landlord at London-based The Kushman Group, said many are still locked out of home ownership.
He continued: “Nationwide’s headline data relies simply on a modest rise in wages that is finally meeting stagnant house prices.
“This technically improves the earnings ratio but it completely ignores the brutal reality of mortgage rates that are still sky high. For a first-time buyer staring at a five per cent fixed rate and a deposit requirement that consumes a decade of savings, this so-called improvement is purely theoretical.
“The visceral cost of living pressure under this government strips away the very disposable income needed to service these loans. Until the cost of debt aligns with the reality of post tax income, these reports serve only to give false hope to a generation locked out of home ownership by high rates and strict stress tests.”
