Deposits for first-time buyers double to £33k

In Scotland the average price of a first-time buyer home is �135,479. Picture: Minerva Studio
In Scotland the average price of a first-time buyer home is �135,479. Picture: Minerva Studio
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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 Scotland the average price of a first-time buyer home is £135,479, with a 16 per cent deposit of £21,751.

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

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 per cent 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 per cent increase compared with a year ago.

There were an estimated 154,000 first-time buyers in the first half of 2016, marking a 10 per cent 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.

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

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 per cent to 27 per cent and a rise in those who used inherited money for their deposit from 3 per cent to 10 per cent.

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.”