Average FTB deposit is 17 per cent
Deposits paid by first-time buyers trying to get on the British housing ladder during the last 12 years have averaged 17% of the overall property value.
This is 2% more than the current average and has taken an average 29 months to save for, according to new research from Santander Mortgages.
Almost one in five first time buyers (17%) have paid between 6 – 10% deposit on their first home, with 3.5m (12%) putting down between 11 and 20% to ensure they secure a foot on to the property ladder. Perhaps surprisingly one in 10 paid almost half of the full property price as a deposit with a further 15% buying the property outright.
When buying their first home, over four in 10 (43%) first home owners counted the pennies and used their savings to enable them to take that first step on to the property ladder. A further 8% relied on inheritance or used money gifted from parents (6%). One in 20 (5%) sought additional work while 4% took out a loan.
Phil Cliff, director of Santander Mortgages, commented: “Our research has found that despite the availability of 5% deposit mortgages throughout most of the noughties, first-time buyers opted to put down an average of 17% deposit to secure their first home – over 2% more than the average deposit currently paid now. The majority have done so via the ‘traditional’ route of savings.
“Santander understands the challenges that often face first-time buyers which is why we offer a number of products dedicated to their needs, including our latest 10% product at a 5.29% rate and £495 upfront fee available exclusively to Santander First Home Saver customers.”
Deposits for first homes in the South West were the highest, at an average of 20.7% compared to London’s 18%. Those in the North East averaged 8.9% of the property’s value.
First-time buyers in London meanwhile were the most independent, with 1.6m (57%) using their own savings to fund the deposit for their first home. This was closely followed by first home owners in Wales (55%).
John Read
John Read, Managing Director of Shaws Estate Agents said: “These figures are perhaps slightly surprising in that the general perception is that it is only since the tightening of mortgage lending after the “credit crunch” that first time buyers have had to find larger deposits. Clearly the reality is that, whilst first time buyers do now have to find a significant deposit, this survey shows that they always have!”
