The average deposit paid for a property in England and Wales has soared in the past year, even though deposit sizes as a proportion of the purchase price falling, new research has revealed.
According to conveyancer My Home Move, the average property deposit across England and Wales increased by £6,000 year-on-year, despite deposit sizes as a proportion of the purchase price falling by an average of 0.21% across the country.
The research also discovered that home buyers across the country were securing their new homes with an average deposit of £59,633, up from £52,783 in 2016.
Doug Crawford, CEO of My Home Move, said: “Despite the decrease in deposit percentages across England and Wales, the rise in house prices between 2016 and 2017 has resulted in the average deposit price increasing by £6,000.
“For many, this amount will have been funded from the equity increase in the home they are selling. However, for first-time buyers and those whose homes haven’t increased in value as quickly as the one they want to purchase, the need for additional funding suddenly becomes very real and can be evidenced in the rate of deposits being gifted by friends and family to second steppers.”
Deposit sizes across in Greater London have fallen by 1.2% in the past year to 25.7%, meaning that home movers now pay an average deposit of £123,00 for a home worth around £479,000.
Crawford said: “Despite property prices increasing across Greater London by £18,000, between 2016 and 2017 (Q1), average deposit values actually fell by c.£738 – suggesting that movers became savvy to mortgage products available, including higher LTV offers and record low mortgage rates.”
The research also showed that despite a national decrease in deposit sizes, the South East, South West, Wales, West Midlands and Yorkshire and Humberside bucked the trend, with deposits increasing across the board.
The largest figure was recorded in Wales as the average deposit jumped from 23% to 37% over the 12 months – the equivalent of £21,000 increase.
For the second year in a row, the North East and North West saw the lowest amount required for a deposit in terms of pounds sterling, while London and South East the most.
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