What Does Data Reveal About the Average Deposit for First-Time Buyers?
The Guardian recently reported that three in ten young households in the UK do not earn enough to pass lenders’ affordability checks for an 85% mortgage. The research carried out with Hamptons International compared average property prices across the UK and found that the average first-time buyer would now need a household income of £37,096 to get a mortgage with a 15% deposit.
Making the assumption that these households would be made of two full-time working people, the paper claims 70% aged 22 to 29 years old would be able to achieve that income level. However, they would still need to raise a deposit of £29,458 to afford the average starter home.
Looking at different areas of the UK in greater detail, it was revealed that affordability varies greatly.
Although unlikely, should a first-time buyer decide to purchase in one of the UK’s most expensive counties, Kensington and Chelsea, the average property costs £1.1m. A property purchase of this value would require a deposit of £112,526 and household earnings of £225,052 – with both of these figures higher than the average property price in some parts of the UK.
