Just how much renters need financial help from the government’s Help to Buy mortgage guarantee plans is revealed by new figures that show most would take 23 years to save enough money for a deposit.
The scale of how hard saving is for renters was examined by Scottish Widows, with a study that shows half of renters have no savings, while a third of renters are saving nothing.
The firm says many renters say they have given up the hope of ever owning a home, while just 29% are actively trying to save for a deposit.
Savers living with family have an average of twice the savings of those paying rents – £12,140 compared to £29,830.
Three out of four private renters claim they have no spare cash for savings – with a third confessing they are not saving any money and 20% admitting they just save for short term financial goals.
The research suggests private renters are financially at risk – one in six would run out of savings in less than a month if they could not work, and 50% reckon their savings would last less than a ‘couple of months’.
In his Budget 2013 speech, Chancellor George Osborne announced the Help to Buy scheme that will start in 2014.
Although details are sketchy, the government will provide shared equity loans or underwrite mortgages for home buyers who can afford a mortgage but cannot save for a deposit.
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.”
