The average deposit size being put down by people taking their first step on the property ladder in London has increased by more than £20,000 since last year, according to new research published today.
Halifax found that, in the 12 months to February 2020, the average deposit put down by first-time buyers in the capital was calculated at £111,321, but in the 12 months to February 2021 it was put at £132,685.
The average London house price in the 12 months to February was £462,617, with the average deposit as a percentage of the total house price being 24 per cent.
Halifax compared average first-time buyer deposit sizes in the 12 months to February of last year with the 12 months to last month.
House price increases as well as requirements to put down a bigger deposit as a percentage of the house price mean that first-time buyers have needed to stump up more cash.
Across the UK
First-time buyers across Britain need to find nearly £12,000 more for a deposit than they would have done a year ago, Halifax said.
The typical deposit that a first-time buyer needs to put down has increased in every UK region over the past year and now averages nearly £59,000, the data showed.
The average first-time deposit is now £58,986 or around 23 per cent of the house purchase price, Halifax found, marking an £11,677 increase compared with an average deposit of £47,309 or 20 per cent of the house purchase price a year ago.
Many low-deposit mortgages disappeared from the market last year amid concerns about the impact of the coronavirus pandemic on the wider economy.
Lenders will be taking part in a new 5 per cent deposit mortgage guarantee scheme later this spring, which should boost the availability of ultra-low-deposit deals.
However, would-be home buyers will still need to make sure they meet lenders’ criteria to qualify, which could be difficult for some as the pandemic takes its toll on the jobs market.
“We know that lockdown restrictions have made it more practically challenging for those buying and selling, but the stamp duty holiday has helped drive record levels of mortgage approvals as those held back by lockdown race to make savings,” Andrew Asaam, mortgages director at Halifax, said today.
“Raising a deposit is still the biggest struggle for those looking to take their first step on to the property ladder,” he added.
“We know that first-time buyers will benefit from steps that make a deposit more attainable and we’re committed to lending £10 billion to help people buy their first home this year,” Asaam concluded.