First-time buyers are typically saving an eye-watering lb31,000 for any mortgage deposit, based on new figures from Experian.
The credit-scoring website says that this represents a rise in excess of lb3,000 previously Twelve months, showing the challenges people face when trying to buy their first property.
At the same time frame, the amount of virginia homes has fallen, according to NAEA Property Mark.
Here, Which? looks at why the typical first-time buyer deposit may have increased and explains how first-time buyers can get ahead inside a slow-moving property market.
How much deposit are first-time buyers really putting down?
Experian claims that the average first-time buyer deposit happens to be lb30,989 – a 12% increase on January 2022, once the average was lb27,768.
The numbers should, however, be given caution as they’re just based on people who’ve used Experian’s mortgage eligibility tool, that allows potential homebuyers to check how likely they are to be approved for any mortgage.
The latest English Housing Survey found the typical first-time buyer deposit had fallen by almost lb4,000 in the financial year 2022/18 – however the average deposit cited by this survey was lb44,635, significantly higher than the sum Experian reported.
Percentage-wise, Halifax claims that the average deposit pay by first-time buyers is 16% from the property price, although technically you can get a mortgage with a deposit of as little as 5%.
The lender has also told Which? the average cash sum paid in every UK local authority in 2022. You will discover what individuals are paying in your area within our help guide to just how much deposit you'll need.
Why might first-time buyers be saving more?
David Blake, from Which? Mortgage Advisers, says: ‘Theoretically, there's no reason a first-time buyer will have to save a bigger deposit now than, say, two years ago.
‘The key reason for needing a larger deposit is generally either house price increases or mortgage affordability issues.
‘In many cases, lenders have tightened on just how much they lend, and if wages also have remained stable or decreased this might explain why larger deposits are needed.
‘The good news is, if you are capable of making things work, mortgages are actually cheap compared to their historic pricing and so buyers need to look towards longer-term fixed-rate mortgages.
‘That said, there are lots of attractive variable-rate products available on the market that allow individuals to keep their options open, which also appeal to many borrowers.’
Number of homes for sale tumbles
Separate research from NAEA Property Mark finds the number of properties available for sale per estate agent was at its minimum in March for seven years, with just 37 per branch typically, compared to a lot more than 50 in March 2022.
This might be because of the Brexit effect, with lots of sellers deciding to delay putting their houses on the market until we all know if the UK will leave the EU having a deal or otherwise.
House-hunting tips
If you’re keen to purchase a house at some point and haven’t found anything suitable in your town, these pointers may help you receive a step in front of the competition.
Make friends with estate agents
You can improve your chances of finding a property by getting out there and chatting to auctions.
Register personally within their branches, then give them a call regularly for updates. Creating a good relationship together with your local agents can often mean you’re the very first person they call whenever a suitable property hits the marketplace.
Don’t restrict yourself to only one estate agent; register with any that are selling the kind of home you want to buy within the areas you need to buy in.
In the video below, estate agents let you know that you may be the very first person they call whenever a new property is offer for sale.
Leaflet in your desired area
If you need to buy a home inside a particular area but there is nothing approaching on the market, try leafleting in your desired streets to allow people know you’re keen to purchase.
You will include your contact information and the kind of property you’re interested in.
Selling by doing this could appeal to some homeowners as it means they are able to not pay auctions fees, as the upside for you personally is that you’d have first dibs on a property other buyers didn’t know was on the market.
The potential disadvantage is when the homeowners haven’t proactively take their house up for sale themselves, they may be less motivated to sell which could result in disappointment further down the line if they accept an offer however have a change of heart.
First-time buyer schemes
If you’d like to purchase a home but they are can not save up a big-enough deposit, you could look at the following options:
