New research has revealed that even after adjusting for inflation, the average British first-time buyer has seen the initial cost of a mortgage deposit climb by 41% in the last decade – meaning they now require over £10,000 more to secure their first foot on the ladder.
The research, conducted by Barrows and Forrester, shows that in 2012, the average first-time buyer house price was £141,572, requiring a 15% mortgage deposit of £21,236, or £24,660 when adjusting for inflation.
Today the cost of a first home has climbed to £231,917, with the average deposit sitting at £34,787. This is a £10,127 jump, increasing by 41% in the last decade.
Regionally, the East of England has seen this barrier to homeownership climb by the greatest margin, with the average first-time buyer deposit now 51% more than it was a decade ago.
London ranks second along with the East Midlands with a 47% increase.
Scotland is home to the only three areas to have seen the cost of a mortgage deposit on a first home decline in the last 10 years.
“The outlook is currently a very bleak one for those yet to secure that first foot on the property ladder”, said Managing Director of Barrows and Forrester James Forrester. He continued:
“Earnings have failed to keep pace [with house price growth], with a sustained period of record low interest rates also making the task of saving a deposit extremely difficult.
While our savings may now accumulate a greater level of interest with the base rate increasing, the downside is the cost of securing and repaying a mortgage is also starting to climb considerably.
So even those that are able to make it to that first rung of the ladder will now find their household income stretched even further due to higher mortgage rates.”
