Average first-time buyer deposit 'more than doubled' since 2007


The average deposit for a home being put down by a first-time buyer has more than doubled since 2007, a report has found.

Someone getting on the property ladder in May 2016 needed to put down £33,960 typically as a deposit - compared with an average deposit size of £16,400 in 2007, Halifax found.

In London, an aspiring first-time buyer now needs to save £95,693 on average just for a deposit.

Halifax said across the UK, the average deposit size had increased by 14% over the last year alone, "largely reflecting the increase in house prices over that period".

The average first-time buyer home now costs just shy of £200,000 - at £199,414 - a 12% increase compared with a year ago.

There were an estimated 154,000 first-time buyers in the first half of 2016, marking a 10% increase compared with the same period a year earlier. The figure was more than double the amount seen in the first half of 2009, but nearly a fifth lower than at the peak of the last boom in the first half of 2006.

The report said Brent in North London was the least affordable local authority district for first-time buyers, with homes there costing around 12.5 times gross average annual earnings in the area.

East Dunbartonshire in Scotland was named as the most affordable area in the UK, with a home there costing 2.6 times the average local wage.

A report from the English Housing Survey said this week that the proportion of single first-time buyers halved from 29% in 1994/95 to 14% in 2014/15.

This means 86% of first-time buyer households now contain two or more people. Around four in five (80%) first-time buyers are couple households - a marked increase since 1994/95 when the proportion was less than two-thirds (63%).

The report said: "This may be due to an increasing need for two incomes to be able to buy."

The English Housing Survey also said that first-time buyers were increasingly relying on friends and family or an inheritance to raise enough cash to buy a home.

It said between 1994/95 and 2014/15, there was an increase in the proportion of first-time buyers who had help from friends and family from 21% to 27% and an upswing in those who used inherited money for their deposit from 3% to 10%.

Chris Gowland, mortgages director at Halifax, said: "There was a further increase in the number of first-time buyers in the first half of the year with the total exceeding 100,000 in the first six months of each year since 2012.

"This rise has been broadly in line with a general improvement in market activity and is likely to have been helped by government measures including the Help to Buy scheme.

"Although numbers remain below their previous peaks and many potential first-time buyers are facing escalating house prices and deposit sizes, record low mortgage rates continue to make buying seem a more attractive option than renting."

Halifax used figures from its own database, the Council of Mortgage Lenders (CML) and from the Office for National Statistics (ONS) to make its findings.

A spokesman for the Department for Communities and Local Government said more than 300,000 people have been helped to buy a home through Government-backed schemes since 2010.

He said: "However, we're determined to do more. That's why we're extending shared ownership, giving more people the chance to buy a home with a deposit of as little as £1,500. 

"We're also delivering 200,000 starter homes exclusively for first-time buyers with at least a 20% discount."