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

Published by Hannah Nemeth on 13 August 2018.
Last updated on 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
North 126,685 107,682 19,003 15%
Yorkshire and the Humber 140,766 119,651 21,115 15%
North West 148,055 125,847 22,208 15%
East Midlands 163,218 138,393 24,825 15%
West Midlands 168,519 142,618 25,901 15%
East Anglia 210,639 171,723 38,915 18%
Wales 140,201 123,615 16,586 12%
South West 207,329 169,958 37,371 18%
South East 275,632 222,711 52,921 19%
Greater London 419,608 304,656 114,952 27%
Northern Ireland 124,035 105,429 18,605 15%
Scotland 139,318 118,712 20,605 15%
UK 208,741 175,614 33,127 16%

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 District Region Average house price (£s) House price to average earnings ratio
Pendle North West 97,387 3
Stirling Scotland 143,148 3
Inverclyde Scotland 100,786 3.1
West Dunbartonshire Scotland 94,658 3.1
North Ayrshire Scotland 100,703 3.1
East Ayrshire Scotland 100,160 3.2
South Ayrshire Scotland 113,851 3.3
Renfrewshire Scotland 114,173 3.4
North Lanarkshire Scotland 106,399 3.4
County Durham North East 106,495 3.5

Source: Halifax, Office for National Statistics

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

Local Authority District Region Average house price (£s) House price to average earnings ratio
Brent London 478,995 12.7
Haringey London                                        491,880 11.5
Newham London                                         373,504 11.4
Hillingdon London                                        395,810 11
Hackney London                                        488,626 10.7
Harrow London                                        456,624 10.7
Waltham Forest London                                        405,522 10.4
Ealing London                                        427,319 10.4
Lambeth London                                        458,416 10.2
Islington London                                        562,485 10.1

Source: Halifax, Office for National Statistics

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