First-Time Buyers Need Average Deposit Of £33,000, Report Finds

First-Time Buyers Need Average Deposit Of £33,000, Report Finds

First-time buyers make up nearly half of all house purchases financed by a mortgage but those taking their first step on the property ladder need to put down a £33,000 deposit on average, a report has found.

During the first half of 2017, 47% of all house purchases with a mortgage across the UK were made by first-time buyers, according to the Halifax First-Time Buyer Review.

But the average price paid for a first home is at a record high of £207,693, Halifax found. The average first-time buyer deposit put down in the first six months of 2017 was £32,899 - equating to 16% of the purchase price.

In London, first-time buyers need to put together a deposit of £106,577 typically, or 26% of the average price of a home.

First-time buyers in Northern Ireland put down the lowest deposits in cash terms on average, at £16,457. In Scotland, first-time buyers need a deposit of £21,565 on average while in Wales the typical first-time buyer deposit is £17,193.

Across the UK, the number of first-time buyers reached an estimated 162,704 in the first six months of 2017, which is only 15% below a peak seen in the last boom in 2006, Halifax said.

Schemes such as Help to Buy, combined with low mortgage rates, have given aspiring home owners a helping hand in recent years.

The proportion of first-time buyers has grown from 44% since the launch of Help to Buy in 2013, Halifax said.

There are also signs of first-time buyers stretching their loans out for longer, beyond the traditional 25-year term, to cover higher house prices.

In 2016, more than half (56%) of their mortgage terms were for 25 to 35 years. In 2007 just over a third (38%) of first-time buyer mortgages were for between 25 and 35 years, Halifax said.

The least affordable area for first-time buyers was identified as Brent in London. A typical first-time buyer home there costs £459,499 or around 12.5 times local average earnings.

Stirling in Scotland was identified as the most affordable place for first-time buyers, with a home there costing around £136,181 or around 2.9 times local average earnings.

Halifax used figures from the Council of Mortgage Lenders (CML) and the Office for National Statistics (ONS) for the research.

Martin Ellis, a housing economist at Halifax, said that for the third time in four years the numbers getting on the housing ladder in the first half of the year have exceeded 150,000 - "a level of momentum not seen since before the financial crisis".

He said: "High levels of employment, low mortgage rates and government schemes such as Help to Buy have also helped these numbers remain robust, as first-time buyers continue to form a fundamental part of the UK housing market."

Here are the average house prices paid by first-time buyers across the UK in the first half of 2017, followed by the average deposit and the deposit as a percentage of the purchase price, according to Halifax:

:: North East England, £125,591, £18,594, 15%

:: Yorkshire and the Humber £137,908, £19,848, 14%

:: North West England, £146,551, £21,382, 15%

:: East Midlands, £158,021, £23,747, 15%

:: West Midlands, £164,737, £24,826, 15%

:: East Anglia, £198,876, £33,138, 17%

:: Wales, £136,103, £17,193, 13%

:: South West, £202,700, £35,655, 18%

:: South East, £276,773, £50,144, 18%

:: London, £409,795, £106,577, 26%

:: Northern Ireland, £117,716, £16,457, 14%

:: Scotland, £139,041, £21,565, 16%

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