New data from the mortgage lender have revealed the average deposit being paid by those stepping onto the first rung of the housing ladder have barely changed since 2008, when 14% was the typical amount they were offering up front.
In 2009, just after the credit crunch had hit and 100% mortgages which required no deposit were eradicated, average first-time buyer deposits soared to 20%, their highest level in the last decade.
But it’s no wonder first-time buyers struggle to achieve this high again, as soaring property prices mean the average deposit is now much more expensive than it was in 2009.
In 2018, Halifax revealed, UK first-time buyers were putting down a typical deposit of nearly £33,000, which was 57% higher than the £21,000 they were stumping up in 2008.
This figure varies wildly from region to region. In London the average first-time buyer deposit in 2018 was £110,000 while, at the other end of the affordability scale, Wales had the lowest average of £16,000.
First-time buyer ages
As a result, the age of the typical first timer has also increased. According to Halifax it has risen from 29 in 2008 to 31 in 2018. In London it has increased from 31 to 33 in the decade and in Northern Ireland it soared by three years from 28 to 31.
Propping up the market
Despite affordability challenges, it would appear first-time buyers are supporting the mortgage market. Indeed, numbers are up and Halifax revealed they accounted for just over 50% of the all house purchases with a mortgage – an increase of 38% on a decade ago.
In fact, this is the first time in 23 years they have made up the biggest proportion of the property market.
Russell Galley, managing director of Halifax, said: “New buyers coming on to the ladder are vital for the overall well being of the UK housing market, and the continued growth in first-time buyers shows healthy movement in this important area – despite a shortage of homes on the ongoing challenge of raising a deposit.
“Last year was the first year that first-time buyers accounted for the majority of the market since 1995, which shows that the factors reducing some of the associated costs – such as continued low mortgage rates and Stamp Duty – are supporting the increasing number of people taking their first step on the property ladder.”
