Average deposit climbs above £50,000

by Gary Whittaker

The average deposit needed by a first-time buyer in Britain has risen above £50,000 for the first time. 

A study by mortgage advisor L&C Mortgages indicates that buyers now typically need £51,821 to start with, a figure it estimates will rise to £65,930 five years from now and then to £81,468 in 2027.

The latter figure would represent 28 per cent of the typical home's price and at present a quarter of first-time buyers have saved nothing towards a deposit as yet.

Such findings would suggest many young people who are presently renting will need to carry on doing so for longer than they might have hoped and expected. 

The survey suggests London deposits will be even harder to afford, rising 75 per cent over the next decade from the present £139,987 to £244,842. 

Other cities fare better, with smaller but still significant increases such as 62 per cent in Brighton and Hove and 59 per cent in Bristol. There will also be increases of more than 50 per cent in Norwich and Edinburgh.

The lowest of all will be 41 per cent in Belfast, but even this would represent a rise from £29,682 to £41,755.

Commenting on the findings, L&C spokesman David Hollingworth said:"With this research predicting that the size of deposits required could rise considerably across the country, first time buyers could be forgiven for giving up hope on owning their first home."

He added: "Pulling together a deposit continues to represent one of the single biggest challenges and these forecasts will make frightening reading for aspiring first-time buyers." 

The particularly large increase projected for London suggests experts anticipate the capital's current modest price growth will not last and the metropolitan market will soon heat up again.

Hometrack's latest figures indicated the capital has only seen prices rise by there per cent in the past 12 months, compared with 6.1 per cent for British cities as a whole.

Only Cardiff saw a lower price rise than London, although Oxford and Aberdeen saw prices fall. The latter was attributed to the recent plunge in oil prices.

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07-December-17General Lettings News