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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