Worrying new research from Compare My Move has revealed that millennial women must save on average for an extra 8 months to secure their first home compared to their male counterparts.
On average, British women take 3 years and 8 months to save a 10% deposit while renting, whereas it would take men only 3 years to save for the same house.
According to the findings, the gender pay gap for 22 to 29-year-old full-time employees means female savers have around £100 less to put towards their deposit each month.
The difference is stark in areas where house prices greatly outstrip average millennial wages. Cambridge is the worst place for female first time buyers, taking millennial women 11 years and 9 months to save the average 10% deposit in the area, a whole 3 years and 10 months longer than their male counterparts. In contrast, the research crowns Dundee as the most equal for first time buyers, with female millennials having to save “only” an extra month over their male counterparts.
Compare My Move explored the saving journey of young men and women renting in areas they are looking to buy a home. The research uses living costs associated with leading a normal life including food, travel, rent and socialising. We used regional wage data for 22 to 29-year-old male and females and the latest official first time buyer house prices to explore how the gender pay gap is causing hardship for first time buyers.
Where are the worst towns and cities for female first time buyers?
In 13 of the largest towns and cities in Britain, female first time buyers must spend an extra year or more saving compared to their male counterparts. In areas where house prices greatly outstrip the wages of millennials, all first time buyers find it particularly difficult to get on the property ladder. The pay gap means a dire situation is compounded for female first time buyers.
It will take the average female millennial in Cambridge 11 years and 9 months to save a 10% deposit for the average first time buyer home in the town. This is 3 years and 8 months longer than their male counterparts. High rents and living costs means that female millennials in Cambridge can only save £265 a month in expendable income. Male millennials still face a huge challenge in the area but can save an extra £130 a month on account of the regional pay gap, allowing them to save a 10% deposit in 7 years and 11 months.
Where millennials are strapped for cash, the pay gap has the worst effect on the savings process. Females must save for an extra 3 years in Oxford, an extra 2 years in Slough, and an extra 1 year and 10 months in London.
And the best?
Although female millennials face a longer save in all 51 of the towns and cities analysed by Compare My Move, 6 areas can be deemed the best of a bad situation. In these areas females will “only” add 3 months or less to the time spent saving.
Of these areas, 4 are found in Scotland, two in Wales. These areas are the closest to equality on account of a lower regional pay gap and lower-than-average rents, house prices and living costs.
Dundee tops the list as an area which approaches equality of savings, with females having to save “only” an extra month more than their male counterparts. This is down to the lowest pay gap on the list, coupled with the highest level of expendable income for millennials. Low rents and a low cost of living allows both male and females in Dundee to save the largest amount each month, more so than areas with better pay.
This shows how the effect of the gender pay gap is lessened in areas where millennials aren’t so stretched by high costs of living.
Dave Sayce, Compare My Move Co-founder, said: “Our latest research shows the struggle faced by first time buyers to get together a deposit is intensified by the gender pay gap. Females are most affected in areas of high living and renting costs, where the expendable income available to young savers is seriously squeezed. When coupled with high house prices, the pay gap compounds the issues faced by all first time buyers.
When the average female can put away £100 less than the average male a month, it’s easy to see how savings are affected. In the worst area, females have to save nearly 4 years longer than their male counterparts, causing them to save for well over a decade.”