Britons struggle to save for down payments on homes

Most Britons between the ages of 20 and 45 who want to buy a home are not able to save money to put towards a down payment, excluding them from the country's strongest property market in 3-1/2 years.

Those who said they were unable to save anything for a deposit on a home rose to 57 per cent from 42 per cent a year earlier, a survey by mortgage lender Halifax showed, and one in five British residents between the ages of 23 and 27 had no interest in buying somewhere to live.

Record-low interest rates, credit-boosting programmes and a lack of supply are fuelling price increases, making it harder for first-time buyers to make a down payment.

While the government's Help-to-Buy plan assisted homebuyers with deposits, encouraging higher loan-to-value mortgages in the current market was "extremely reckless", Citigroup chief economist Willem Buiter said.

"We may be heading towards the point where the aspiration to own a nice home will be replaced by the aspiration to simply live in one," Halifax mortgages director Craig McKinlay said.

British house prices climbed 7.2 per cent last month to an average of £262,291 (HK$3.4 million), the largest annual gain since September 2010, Acadata said in a report this month.