Your home will probably be the most expensive, and most significant, purchase that you’ll make in your lifetime. A key stage in the house buying process is arranging finance for your new property – and that usually takes the form of a mortgage. As is the case for most high-value credit agreements (such as a new car for example), prospective new homeowners are required to place a deposit against any mortgage. This deposit is often sourced from funds released from the sale of an existing property, but what if you’re a first-time buyer? In this article we’re going to look at the trends for first time buyer deposits, as well as helping you make sure you get a great deal on your new home!
The Figures – and what they mean for you
According to UK Mortgage Lender Halifax, the average deposit for a first-time buyer in the UK was £32,8411. As you may expect, there are enormous differences between cities, boroughs and counties. For example, first-time buyers in Greater London are paying an average of £110,656; while those in Wales have deposits as low as £16,449.
Here’s a handy chart showing the average for each local authority with data from Halifax, courtesy of Which.co.uk.
Measured as a proportion of property value, the average deposit (for first time buyers or generally?) has settled at around 15% according to 2018 figures. This is a significant reduction from the 20%, or one fifth, paid by first time buyers in 2009.
Many more people are succeeding in being able to buy their first home, with just over half of all mortgage-backed residential property sales being purchased from first time buyers – again an increase from 2009 when the figure was 39%. The average total price paid by first time buyers has also risen, from £153,030 in 2008, to £212,473 – an increase of 39%. (where are these figures from? Be careful to keep referencing)
These figures, although averaged over the UK, provide a useful snapshot of the opportunities and challenges facing first time buyers. Of course, one of the most important stages of buying a house is financial planning – and making sure that you can afford the property you are looking for, in the area you want to live. The average UK salary for full-time workers is £35,423, so an average mortgage deposit is approximately eleven-month’s salary.2
When you’re making such a significant investment, it’s important to ensure you’re making an informed decision and you have a full picture of the condition of the property.
Home buyers who do not invest in a survey pay an average of £5,750 in unexpected repairs after purchase. That’s the cost of a new bathroom!
Our surveyors can help identify issues with the property in an easy-to-understand traffic light colour code in a detailed HomeBuyer Report.
Sources
[1] https://www.lloydsbankinggroup.com/Media/Press-Releases/2019-press-releases/halifax/first-time-buyers-make-up-biggest-part-of-property-market-for-first-time-in-23-years/ | Retrieved 10/06/2019
[2] https://www.findcourses.co.uk/inspiration/articles/average-salary-uk-2018-14105 | Retrieved 10/06/2019What is the average first time buyer deposit?