Gender save gap 2023: The effect on first-time buyers

We uncover the price of purchasing a house in 2023 as a first-time buyer, including how the gender pay gap affects female savers and the cost of running a home.

Amy Smith
Amy Smith
Updated 25 July 2023  | 6 min read

Getting on the property ladder is a goal for many residents in Britain, but it can also be a gruelling task, as soaring costs have increased the pressure on first-time buyers. As house prices continue to rise, but salaries don’t increase to match, young people are faced with the difficult challenge of saving their pennies for longer.

We take a look at just how long first-time buyers will need to save for in 2023 to afford both a deposit and moving costs, as well as the effect that the gender pay gap has on female savers. Of course, the costs don’t stop for homeowners, so we’ve also calculated the average price of maintaining and running a house.

The cost of buying a house today

As a result of high house prices and low disposable income, our research has found that the average first-time buyer (22 to 29-year-olds) will need at least three years to save up for their own home.[1]

The average house price paid by first-time buyers hit its highest point in April 2023 and now sits at over £236,000.[2] This means that the average deposit needed (at 10%) has reached a staggering £23,668.20. Combined with the additional costs of purchasing a home, including legal fees and building surveys, first-time buyers now need to save an average of £26,305.80 in order to buy a house.[3]

Unfortunately, such a high cost means that most first-time buyers will be saving for several years before they can afford to purchase a property, and some could be saving for far longer. We’ve estimated that three years is the minimum time first-time buyers will need to save this amount, but many simply won’t be able to save at this rate. In this case, the actual time frame needed for many savers is much higher.

Meanwhile, some first-time buyers might choose to save for longer to build a larger deposit. This can lower the cost of mortgage repayments as it reduces the total amount borrowed. Others may also need longer to save to ensure they budget for the costs of owning a home, which can run into thousands of pounds.

The gender pay gap means women need 40% longer than men to save for their first home

Although the cost of buying a house is high for all first-time buyers, the gender pay gap means that women are at an immediate disadvantage while trying to save. We’ve looked at how much of an effect this has on female savers and if the gap is closing or widening.

We calculated that it takes women over 40% longer than men to save for their first home, all thanks to the ‘gender save gap’.[1] This is because men can put more money away per month than women, meaning they can save at a faster rate.

Female first-time buyers require a minimum of 3.6 years to save the average amount needed to buy a house, whereas men only require 2.6 years. That means women must wait 42% longer than men before they can afford their first home.

The gender pay gap measures the average difference in women’s salaries compared to men’s. According to ONS data, the average weekly earning for a 22 to 29-year-old man is £572, yet women of this same age group earn less at just £489 on average.[4]

This lower earning will directly impact the amount that female first-time buyers can save each month towards a house.

One of the main reasons for this is that women’s lower salaries will leave them with less disposable income per month than men. Female first-time buyers have an average of just £602 compared to £856.[5]

This financial disadvantage of £254 means they have less cash to stash away into savings each month.

Despite this, our findings show that the ‘gender save gap’ is slowly closing. Running this research in 2021 revealed that women needed 50% longer than men to save for their first home, a figure that has fallen to 42% two years later.

The real cost of running your first home

First-time buyers are often required to continue budgeting once they’ve made it onto the property ladder, as the price of owning a home can also have an impact on their wallets. We’ve estimated that running your first house currently costs just shy of £2,000 per month.[6]

This takes into account the average costs of regular homeowner expenses, including mortgage repayments, bills, and maintenance and repair fees. While mortgage repayments on your first home make up the largest chunk of this amount, bills, such as energy, internet, water and council tax all add up too.

When considering how much you can afford to spend on your first home, it’s important to also budget for the money you might need for maintenance and repairs on your house. Based on the average first-time buyer house price, new homeowners might need to set aside just under £200 per month for this.

Combined home insurance is another fee to consider when working out how much you’ll need to allow for once you’ve bought a house. This type of policy covers your building and your contents, meaning that both the physical structure of your house and your belongings are protected in case of a fire, flood, theft or another unexpected event.

Typically, home insurance will be one of the lowest costs of owning a house. An average monthly premium is just £15.83. Unlike many other fees, it’s not a legal requirement, but it could save you thousands should you ever need to claim.

Paula Higgins, Chief Executive at the HomeOwners Alliance, shares her advice on some of the hidden costs of buying and owning a home:

When buying your first home, you’ll find it involves a lot of additional costs that you need to factor in when working out what you can afford. This includes legal fees, taxes, surveys and removal costs.

"Once you own your first home, you’ll discover there are also a lot of costs involved in running it that you may never have had to deal with before. This includes ground rent, service charges, ongoing maintenance costs and utilities. It’s particularly important to understand the ongoing costs and look at how they will increase over 10 years if you buy a flat or a new build as these can vary widely depending on the building or estate.

"Getting a survey on your property is also a good way to understand what future maintenance and improvements may be required. Understand the full range of costs involved with our guide on the cost of buying and owning a home.”

How can first-time buyers speed up saving?

If you’re struggling to save up for your first home, remember to check if there are any government programmes available to you. Schemes such as First Homes and Shared Ownership can help you get on the property ladder with a smaller deposit.

Paula Higgins also discusses what help is available from the government and if they should be doing more for first-time buyers:

The government’s flagship Help to Buy equity programme ended in March 2023 leaving a hole for aspiring homeowners. But there is still help for first-time buyers and rumour has it that the government may launch new initiatives to help first-time buyers bridge the deposit gap.

"In the meantime, there is the mortgage guarantee scheme designed to help increase the supply of 5% deposit mortgages by encouraging lenders to offer these products. First-time buyers can access the scheme via their mortgage broker and need to act quickly as it’s due to close in December 2023.

"There are other ways the government is helping - through Lifetime ISAs, First Homes, Shared Ownership and developer-led initiatives such as Deposit Unlock. The government can do more though, by encouraging lenders to offer longer-term fixed mortgages and to take into account regular payments of rent when they assess how much they will lend. But fundamentally, we haven’t been building enough housing for 30 years which will continue to constrain supply.”

About this data

[1] To work out the estimated minimum time (in years) that a first-time buyer would need to save for a house (total of £26,305.80), we divided this cost by the average disposable income of a first-time buyer. We also split this by sex to compare the difference between men and women.

Any reference to men and women within this research refers to comparisons by sex rather than gender - although there are multiple genders, our sources used sex rather than gender to differentiate their data.

[2] The average first-time buyer house price (£236,682.00) was taken from the UK House Price Index Summary: March 2023

[3] The total cost needed to buy a home was calculated by taking the average deposit cost (10% of the average first-time buyer house price - £23,668.20) and adding additional legal fees, moving costs and house survey price, sourced from Which? - totalling £26,305.80.

[4] Average weekly earnings for 22 to 29-year-olds for both men and women was sourced from the ONS dataset: Earnings and hours worked. This age group was used as it was identified that most first-time buyers save for their house during this life stage.

[5] To calculate the disposable income of male and female first-time buyers, we first took the average weekly earnings and used ListenToTaxman to apply the relevant deductions (tax, national insurance and pension (min. 5%)) to find the net weekly income. We then applied this total to ONS data on the average expenditure for adults under 30 to find the remaining disposable income.

This age group was used as it was identified that most first-time buyers save for their house during this life stage. To account for inflation since this dataset was last updated, we multiplied the expenditure costs by the percentage of inflation in May 2023.

[6]To calculate the total monthly cost of running a home, we used the following sources:

  • Combined home insurance from Go.Compare - £15.83.
  • Mortgage repayments calculated using the Go.Compare mortgage calculator. We used the average first-time buyer (FTB) house price with the deposit deducted and applied a 6.1% average mortgage rate, sourced from Moneyfacts - £1,291. This mortgage rate was the most up-to-date at the time of writing.
  • Maintenance and repair fees from Checkatrade, based on 1% of the home's value per year, using the average FTB house price - £197.24. This is the amount Checkatrade recommends homeowners budget for such costs.
  • Average energy bill from Money Helper 2022 - £208.33, average internet bill from Ofcom 2021 - £44, average water bill from Water UK 2022 - £34.92, and average council tax bill in England from Gov.UK 2023/24 - £157.80.