Since the financial crisis began in 2008, banks have been demanding deposits of around 25 per cent of the value of a property. However, having to pay high levels of rent and the rising cost of living is making it difficult to save enough.
According to a survey of 5,000 adults, the average private renter saved £2,180 in the last year – meaning it would take 23 years to save the average deposit of £50,845.
Many renters have given up on the idea of moving onto the property ladder at all, with only 29 per cent saying they were actively saving to put a deposit on a home. One in five renters say they are saving for the short term while 35 per cent are not saving at all.
One in six private renters say their money would last less than a month if they were unable to work while half say they would only be able to support themselves for a couple of months. 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.
“Whilst owning a property is seen for many as something to work towards, the first priority is to ensure that the mortgage or rent can be met, and next creating a safety net for unforeseen events. Adding to a savings pot is even more difficult in challenging economic times, but it is this that we should all be aiming for.”