Buyers need to find £33,000 deposit for first home

13 August 2018

Buyers are having to put down record deposits, averaging at £33,127 nationally, on their first home, as property prices for first-time buyers hit almost £209,000.

Research by the Halifax has revealed that the average deposit is now £33,127 – up by 71% from £19,364 in 2008.

Meanwhile, first-time buyers have seen property prices in the UK go up by a fifth (21%) since 2008 with the average price up from £172,659 in 2008 to £208,741 today.

London deposits soar

In London, the situation is much worse, with the average first-time buyer paying a deposit of £114,952 – 27% of the purchase price. This is three times more than in 2008 when it stood at £38,335. 

Average first-time buyer property prices in the capital have almost doubled (by 48%) in 10 years and now stand at £419,608.

Unsurprisingly, first-time buyers are now older than they were 10 years ago - aged 31 nationwide and aged 33 in London – up by two years.

First-time-buyer numbers are up

But despite huge deposits and rising house prices, the good news is that the number of first-time buyers has risen by around 3% in the first six months of 2018 to 175,500, compared with 171,200 in the same period last year.

It’s the third year in a row that more than 150,000 people have bought their first home and is just 8% lower than when it last peaked in 2006 at 190,900.

This means that first-time buyers now account for more than half (51%) of home buyers taking out a mortgage – up from 38% in 2008. 

Russell Galley, managing director at Halifax, says these numbers have been boosted by the government’s Help to Buy Scheme, which has helped 128,317 first-time buyers since its launch in 2013.

He says: “The number of first-time buyers continues to grow and is nearly back to the peak seen of 2006. Government measures, such as Help to Buy, and record low mortgage rates, continue to make buying more financially attractive than renting, with savings of £900 a year.”

Table 1: First-time buyers: average price, loan and deposit by region, 2018

 Average House Price (£s)Average Mortgage (£s)Average Deposit (£s)Deposit as % of purchase price
Yorkshire and the Humber140,766119,65121,11515%
North West148,055125,84722,20815%
East Midlands163,218138,39324,82515%
West Midlands168,519142,61825,90115%
East Anglia210,639171,72338,91518%
South West207,329169,95837,37118%
South East275,632222,71152,92119%
Greater London419,608304,656114,95227%
Northern Ireland124,035105,42918,60515%

Note: House price are simple arithmetic ('crude') averages. Sources: Halifax, Council for Mortgage Lenders

Table 2: 10 most affordable Local Authority Districts (LADs) in the UK for first-time buyers, 2018

Local Authority DistrictRegionAverage house price (£s)House price to average earnings ratio
PendleNorth West97,3873
West DunbartonshireScotland94,6583.1
North AyrshireScotland100,7033.1
East AyrshireScotland100,1603.2
South AyrshireScotland113,8513.3
North LanarkshireScotland106,3993.4
County DurhamNorth East106,4953.5

Source: Halifax, Office for National Statistics

Table 3: 10 least affordable LADs for first-time buyers, 2018

Local Authority DistrictRegionAverage house price (£s)House price to average earnings ratio
HaringeyLondon                                       491,88011.5
NewhamLondon                                        373,50411.4
HillingdonLondon                                       395,81011
HackneyLondon                                       488,62610.7
HarrowLondon                                       456,62410.7
Waltham ForestLondon                                       405,52210.4
EalingLondon                                       427,31910.4
LambethLondon                                       458,41610.2
IslingtonLondon                                       562,48510.1

Source: Halifax, Office for National Statistics

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