Average deposit needed by first-time buyers in UK hits almost £52,000

The average deposit required by a first-time buyer in this country is now £51,821, rising to £139,987 in London, fresh research reveals.

The existing average deposit for first-time buyers sits at a whopping £51,821, and could go up to as much as £65,930 by 2022 and reach £81,468 in 10 years, according to new research.

Based on the data offered, the study suggests that by 2027, the amount that first-time buyers may need to put down to acquire a property could increase by 57% by 2027, although this rate will vary from region to region.

Somewhat incredibly, the average deposit needed by a first-time buyer in London is set to increase to £242,842 by 2027, which is up 75% from today’s level, the study from mortgage advisor L&C Mortgages suggests.

Brighton and Hove and Bristol are also set to see a significant increase in deposits, with L&C Mortgages forecasting that the average deposit for a first-time buyer will increase by 62% and 59% respectively.

Other areas expected to see a sharp rise in first-time buyer deposits include Norwich with a hike of 55% from £40,890 to £51,626 in 2022 and £63,364 in 2027, as well as Edinburgh which faces a 55% jump from £37,661 today to £47,467 in five years and £58,204 in 2027.

Even in Belfast, the city with the lowest percentage increase over the next 10 years, deposits could increase by 41% by 2027, jumping up from the existing amount of £29,682 to £41,755 in a decade’s time.

UK cities Deposit needed today Deposit needed 2022 Deposit needed 2027 Total % increase by 2027
London £139,987 £188,966 £244,842 75%
Brighton and Hove £77,407 £100,032 £125,280 62%
Bristol £58,035 £74,192 £92,062 59%
Norwich £40,890 £51,626 £63,364 55%
Edinburgh £37,661 £47,467 £58,204 55%
Southampton £45,262 £56,775 £69,349 53%
Cardiff £34,400 £42,593 £51,485 50%
Leeds £29,589 £36,633 £44,252 50%
Manchester £28,672 £35,513 £42,912 50%
Birmingham £30,602 £37,792 £45,564 49%
Plymouth £36,384 £44,762 £53,806 48%
Sheffield £26,193 £32,263 £38,797 48%
Glasgow £21,876 £26,904 £32,291 48%
Nottingham £25,132 £30,693 £36,650 46%
Newcastle upon Tyne £26,037 £31,826 £38,046 46%
Liverpool £21,292 £25,852 £30,716 44%
Belfast £29,682 £35,528 £41,755 41%

Source:  L&C Mortgages Research (compiled by Opinium)

With this research predicting that the size of deposits required could increase significantly nationwide, first-time buyers could be forgiven for giving up hope on owning their first home. Check out this first-time property buyer’s guide.

David Hollingworth from L&C commented: “There is some stark variation between cities but the fact that London deposits could be almost hitting a quarter of a million pounds by 2027 is alarming.

“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 current climate. Although there are mortgage deals available to as much as 95% of the property price, rates on these types of deals will be higher than for those who have saved a larger deposit.

“Given the level of commitment that first-time buyers are having to make it’s of little surprise that they are often electing to fix their mortgage rate, so they know where they stand with their mortgage payments.”

L&C also looked at the attitudes of first-time buyers in the UK, asking how they are planning to raise their deposit. On average, first-time buyers expect 44% of their deposit to come from their own cash savings, with a further 15% coming from a Help to Buy ISA and 6% coming from a Lifetime ISA. A further 11% is expected to come from a sum from parents or other family members, and 6% will come from an inheritance.

L&C’s research found that those first-time buyers looking to buy in the next 10 years anticipated they would need £35,402 on average for a deposit – the average £51,821 deposit put down today is almost half as much again.

On average, first-time buyers have currently saved up £16,436 toward their deposit, and predict it will take three years and eight months in total to raise the full amount.

The current savings level doesn’t even amount to a third of today’s average deposit and almost a quarter (24%) of first-time buyers haven’t saved a penny towards a deposit.

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