First-time buyers looking to step onto the property ladder face a long wait to save a deposit, new research reveals.

According to Hargreaves Lansdown, a single first-time buyer would need to save for seven years and five months to reach a deposit of £45,000 using a Lifetime ISA (LISA). This is based on saving the maximum amount allowed and receiving the maximum government bonus.

Saving this way, a single person would pay in a total of £29,667 over the seven and a half years, with the government topping this up with £7,417 in bonuses.

Couples looking to buy together would have a shorter wait, needing to save for four years and one month to reach the same target. This is because two people can open a LISA, benefiting from double the government bonus. A couple would pay in £32,667 and receive £8,166 in bonuses.

House prices remain high

This news comes as average house prices remain stubbornly high, with the average first-time buyer property costing £232,769, according to Halifax. This is just £1,000 less than the post-pandemic peak.

High house prices, combined with high mortgage rates, mean that saving a deposit is a huge challenge for those hoping to buy a home.

LISAs can make a difference

Hargreaves Lansdown’s head of personal finance, Sarah Coles, highlights the benefits of using a LISA for those struggling to save: “The LISA can make an enormous difference to first-time buyers, particularly where house prices are higher.”

Coles also points out that choosing a cash LISA, rather than investing your money, could leave you waiting even longer to reach your target. “If you made 2% on a cash LISA, a single person paying in the maximum might need to save for eight years and four months and a couple for four years and four months.”