Three months longer needed to save for NI home

It takes first time buyers in Northern Ireland three months longer to save for a house deposit now compared to the first quarter of 2004 and nine months longer than in 1994.

According to research from National Savings and Investments (NS&I), since the first quarter of this year, the time it takes to save for a 5% deposit on a typical first home in Northern Ireland has increased from three years to three years three months.

However, Northern Ireland is unique in the UK as the incomes of first time buyers in the region have actually increased at a higher rate than house prices during 2004. First time buyer incomes are now 18% higher than in the first quarter of 2004, while house prices have increased by only 14%.

Dax Harkins, senior savings strategist at National Savings and Investments, said: “The deposit for the average first time property in Northern Ireland is now over £4,100, but first time buyers can reduce the long-term cost of buying a home by starting to save earlier and putting as much as they can towards a deposit.”

However, the first signs of a cooling housing market offer a glimmer of hope for would-be first time buyers, Mr Harkins said. Between 2004 Q2 and 2004 Q3, the time taken to save for a deposit remained static in Northern Ireland, as well as four other regions; East Midlands, East Anglia, London and Yorkshire and Humberside.

This can be explained by increases in interest rates on savings accounts, slowing house price rises and incomes continuing to rise across the UK. If these trends continue, the time required to save for a deposit could reduce in the coming months, he added.

(MB)