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P2P popular with first-time buyers

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Zopa has revealed almost two thirds of its customers aged 18-40 are lending to borrowers via its platform in order to raise a deposit – and over half expect it to reduce the time it will take to reach their target.

Of those surveyed, 34 per cent said they expected lending through the platform would reduce the time until they can buy by more than a year while 21 per cent expect it to reduce their waiting time by six months. A further 22 per cent believe they’ll be able to buy in less than a year, with 47 per cent hoping to purchase in the next three years.

Of those looking to buy, over half are cutting back on clothes and other purchases and more than two out of three consumers are eating out less, going on fewer or cheaper holidays and choosing cheaper options for household essentials to boost their savings. In contrast, one in four are making no lifestyle changes at all.

Of those who weren’t saving for a deposit, 34 per cent said it was because house prices are too high, and almost a quarter said they have other saving priorities at present.

The findings also highlight the significant rise in minimum deposit requirements. Ten years ago, two per cent of savers aimed for a deposit pot of £40,000 or above – today, this figure has increased to over 40 per cent on average, and 55 per cent in London.

Few would-be homeowners receive external financial support either, with only 18 per cent benefitting from government schemes such as Help to Buy, and 55 per cent not expecting assistance from their families in order to reach their deposit target.

For first-time buyers who have had financial assistance, the size of parental contributions is increasing in line with deposits. Ten years ago, only 8 per cent of parental contributions were over £45,000. Last year, this figure stood at 28 per cent.

Giles Andrews, executive chairman and co-founder of Zopa, said: “Buying a home is a major milestone in many people’s lives and saving a deposit is getting harder each year as prices and the amount required increases. I’m proud that Zopa is helping first time buyers reduce the time it takes to own a home by allowing them to grow their money faster with better rates. From April 2016 we will be able to help millions of people keep more of their interest as P2P lending becomes part of the tax free ISA wrapper and personal savings allowance.”

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