The broker revealed buyers are saving on average £33,000 in order to purchase their first home – up from £18,000 just 18 months ago.
The competitive housing market is being attributed to the steep rise in deposit size. Soaring house prices during this time have, in turn, driven up the amount a first-time buyer must save for a deposit.
However, whilst availability of mortgages for those with a smaller 5% deposit has been growing, average first-time buyers today are putting down 22% of the purchase price as a deposit compared to 16% in January 2021.
Mojo said as the market is getting more competitive having a larger deposit will improve affordability for first-time buyers, it also means lower mortgage repayments.
Richard Hayes, founder and CEO of Mojo Mortgages, said: “Inflation is affecting everyone as they have to contend with the cost-of-living squeeze.
“With the energy price cap rising and a high cost of food and petrol, it’s no surprise that many first-time buyers will also be concerned about rising house prices, and how they will be able to save enough money to purchase a home.
“While two people buying together may be able to more easily save the money required, someone looking to purchase on their own without external support might find it harder to get a deposit together.”
In which parts of the UK are the biggest deposits needed?
First-time buyers looking for homes in the South West of England have felt the impact of deposits rising the most, Mojo revealed.
Here, the average down payment more than doubled from £20,000 to £45,000 since 2021. Residents in cities such as Bath, Bristol and Cheltenham were also forking out on deposits worth almost 25% of the purchase price – the highest in the UK.
Mojo also found Londoners continued to have the highest average deposit at £61,000, up 74.3% from 2021.
In Wales, deposit rates had double from £14,947 to £30,000 and in the East of England deposit sizes were the highest proportionally, with residents contributing almost a quarter of the average property price.
Richard added: “While this research highlights the increase in deposit sizes, it’s important for anyone considering getting onto the property ladder to speak to a mortgage broker, no matter what stage you are at.
“This will help you to get a much clearer understanding of your financial situation and what you can afford, which will help you get closer to purchasing your first home.”
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