Tenants 'struggling to save money for deposits'

Published by Sarah Ashcroft

Thousands of people living in rented properties around the UK have little or no prospect of being able to move into their own abode, as saving for a deposit is proving to be too much of an obstacle.

New figures from Scottish Widows show it would take the average renter in the country some 23 years to put enough cash together to buy their first home. The typical deposit is now £50,845, with the average private renter only able to save a little over £2,000 each year.

As such, many people are stuck in rented homes and unable to move out, which can be good news for landlords. Indeed, it might even signal an ideal opportunity to invest in property in order to expand a rental portfolio.

Iain McGowan, head of savings and investments at Scottish Widows, said: "We live in a society where many strive to own their own homes but, for many people facing high rent and increasing living costs, this isn't going to be achievable. Whilst this is concerning, what is most worrying is that over a third of renters have no savings at all and are leaving themselves vulnerable in the short and long terms."

Even the average deposit for a first-time buyer - which stands at £27,984 - would take almost 13 years to gather. It is little wonder that property ownership is effectively nothing more than a dream for plenty of young people.

In fact, the possibility of buying a home is so far-fetched for most than only 29 per cent of people are even making an effort to save towards this purchase. Many of these will continue to rely on the properties on offer from private landlords around the UK.

The impact on renters in terms of the savings they can accumulate is also clear, as the typical renter has £12,142 in the bank, compared to almost £30,000 among those who are not paying fees to a landlord.ADNFCR-1645-ID-801565432-ADNFCR

Published on: April 2, 2013

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