Prospective homeowners across the UK face a daunting multi-year savings challenge to get onto the property ladder, with a particularly severe outlook in the capital, according to new data. Nationwide Building Society has published its latest Housing Affordability Report, revealing a stark regional divide in the time it takes to accumulate a deposit.
A Tale of Two Markets: London Versus the North
The report, released on 20 January 2026, indicates that while affordability has improved nationally, the picture varies dramatically across the country. For a typical first-time buyer property in the UK, a 10% deposit now stands at around £23,000. Based on saving 10% of the average net monthly pay of approximately £320, it would take a prospective buyer nearly six years to save this sum.
However, this average masks a deep regional inequality. In London, where house prices are significantly higher, the required deposit is over three times larger than in the North. Consequently, a Londoner saving at the same rate would need a staggering nine years to build their deposit. In contrast, a buyer in the more affordable North could be ready in just around four years.
Andrew Harvey, Senior Economist at Nationwide, commented on the broader trends. "With price growth well below the rate of earnings growth and a steady decline in mortgage rates, affordability constraints have eased somewhat over the past year," he said. This improvement helped underpin buyer demand, with first-time buyer activity in 2025 around 20% higher than 2024 levels.
Improving Accessibility But a Persistent Deposit Hurdle
The report highlights several positive signs for the market. The first-time buyer house price to earnings ratio (HPER) has improved to 4.7, slightly below its 20-year average. Furthermore, lenders are offering more help, with the share of high loan-to-value mortgages (requiring a deposit of 15% or less) reaching its highest level in over a decade.
For a buyer with a 20% deposit, monthly mortgage payments on a typical first home would now equate to 32% of their take-home pay. While this is slightly above the long-run average of 30%, it is significantly below the peak of 48% recorded in 1989.
Despite these improvements, the initial deposit remains a formidable barrier, especially for those in the private rental sector who are also facing high rents. Harvey noted that saving is "still particularly challenging" for this group.
Expert Warns of a Market Divided by Geography and Generational Wealth
Industry experts have reacted to the findings, emphasising the ongoing difficulty for those without family assistance. Darryl Dhoffer, Founder of Bedford-based mortgage broker The Mortgage Geezer, told Newspage that the report reveals a "healing but divided market."
"FTBs are back – activity is up 20% on 2024. This is vital," Dhoffer stated. "FTBs are the engine that allows ‘second-steppers’ to move. Banks are fueling this with the highest level of low-deposit lending in a decade."
However, he delivered a sobering assessment of the deposit challenge. "The £23k deposit hurdle remains brutal. The ‘6-year’ average wait assumes renters can spare £320 a month. For many in the South, buying without family help remains nearly impossible, while the North offers a far more realistic path."
The Nationwide report ultimately paints a picture of a UK housing market where monthly mortgage payments are becoming more manageable, but the upfront cost of a deposit continues to lock out many aspiring homeowners for years, cementing a profound geographic and generational wealth divide.
