Deposits for first time buyers to purchase their first home have increased by 52% over the past decade according to the Halifax.
The latest survey from the Halifax shows the average deposit for a first time buyer has increased by 52% over the last decade from £27,059 in 2009 to a staggering £41,099.
First time buyer numbers have increased by 139% from 72,180 a decade ago to 172,790 in 2019 even though deposits have significantly over the same period.
The majority of house purchases in the UK financed by a mortgage are now first time buyers on 52% compared to only 38% in 2009 and other buyer types including home movers and buy-to-let investors represent 48%.
Russell Galley Managing Director of Halifax said, while increasing numbers of first time buyers is good news for the housing market it’s saving enough to get a foot in the door that’s still the biggest blocker.
Largest deposits in London
The largest deposits for first time buyers is for London with an average £101,389 or 22% of the property value of £454,085 and mortgage of £352,695.
The following table from the Halifax shows the average house prices and deposits paid by first time buyers for different regions.
| Region | House prices | Deposit |
|---|---|---|
| Greater London | £454,085 | £101,389 |
| South East | £289,134 | £48,598 |
| South West | £215,882 | £36,698 |
| East Anglia | £214,395 | £36,698 |
| West Midlands | £179,542 | £29,683 |
| Scotland | £147,726 | £27,701 |
| East Midlands | £172,453 | £26,868 |
| North West | £156,794 | £25,889 |
| Yorkshire and Humber | £149,140 | £24,038 |
| Wales | £149,019 | £23,645 |
| Northern Ireland | £134,131 | £22,759 |
| North | £128,814 | £21,856 |
Following the capital on less than half the deposit of £48,598 is the South East with average house prices of £289,134 and mortgage of £240,536.
Average house prices for first time buyers have increased 61% in the last decade from £138,413 in 2009 to £224,709 compared to only 51% across the market while the highest rise in values is for London up 99%.
For home movers leaving areas such as London with the highest rise in property values to areas with lower growth, they may have extra equity for a deposit to buy a larger home or can reduce their mortgage.
Help with the deposit for a new home can come from family members as the equity release buyer can access cash using a lifetime mortgage and gift to a child or grandchild.
London is the least affordable region
The least affordable Local Authority Districts (LADs) are all in London with Brent average house price of £481,788 and ratio to earnings of 12.5 times.
Hackney is next with a ratio of 12.4 times based on average property values of £543,136 followed by Newham on 11.2 and values of £387,894.
For remortgage buyers in areas with higher prices gives them an opportunity to release capital which they can use to improve their home.
In contrast the most affordable LAD is East Ayrshire in Scotland with a ratio to earnings of 2.8 and average house prices of only £91,287 followed by Pendle in the North West on 2.9 times and property value of £102,311.
The number of affordable areas have reduced from 83 a decade ago to 38 and half of UK regions have seen first time buyer ages increase by up to two years over the decade.
What are your next steps?
Call our LCM mortgage brokers if you are a buy-to-let landlord with a property, remortgaging and want the best mortgage deal, buying your first home or you are planning to move home.
Start with a free mortgage quote or call us and we can take your details. Learn more by using the mortgage cost calculators, property value tracker chart and equity release mortgage calculator.
For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your home to maintain your standard of living or even buy a more expensive home.
