First-time buyers in Edinburgh, Glasgow will need £58,000 deposit

ESPC said many first-time buyers would need much smaller deposits with a 95 per cent mortgage. Picture: Phil Wilkinson
ESPC said many first-time buyers would need much smaller deposits with a 95 per cent mortgage. Picture: Phil Wilkinson
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Deposits needed by first-time buyers are set to rocket by 
55 per cent and 48 per cent in Edinburgh and Glasgow respectively over the next ten years, a report has revealed.

Would-be home purchasers will need to save up a deposit of £58,204 to buy a home in Scotland’s capital and £32,291 in Glasgow by 2027, the study claimed.

UK-wide, the average first-time buyer deposit could be set to rise by nearly 60 per cent over the next ten years, pushed higher by soaring house prices in London.

David Hollingworth, spokesman for mortgage adviser L&C, which ­compiled the report with Opinium Research, 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.

“It makes sense for first-time buyers to try and raise as big a deposit as possible, but that is very much easier said than done in today’s climate.”

L&C also looked at the attitudes of first-time buyers in the UK, asking them how they are planning to raise their deposit. On average, first-time buyers expect 44 per cent of their deposit to come from their own cash savings, with a further 15 per cent coming from a Help to Buy ISA and 6 per cent coming from a Lifetime ISA.

A further 11 per cent is expected to come from a sum from parents or other family members, and 6 per cent will come from an inheritance.

The research used data from the ONS House Price Index to extrapolate what the average dwelling price and mortgage advances were given to first-time buyers in the UK’s 17 key cities over the past 20 years.

From the gap between the average dwelling price recorded and the average mortgage advance received, researchers calculated what deposits were put up by first-time buyers to secure their purchase.

Meanwhile, Opinium forecasted what prices might do over the next ten years and extrapolated what first-time buyers would need to pay in deposits in five and ten years’ time.

However, the ESPC pointed out that first-time buyers usually acquire property at the lower end of the market – meaning their deposits would not be calculated on average house prices.

David Lauder, spokesman for ESPC Mortgages said: “Many lenders are offering 95 per cent mortgages, and most first-time buyers would be looking for a property in the range of £100,000 to £150,000 in Edinburgh. This would that they would require up to £7,500 for a 5 per cent deposit and £15,000 for a 10 per cent deposit.

“However, first-time buyers may have to pay over the valuation if putting in a bid for ‘offers over’, as mortgages will only lend up to the Home Report valuation, and so this would mean they need to raise more than just the deposit.

“With a 5 per cent deposit, this could be achievable for many, although there could be a slightly higher interest rate for those mortgages.”