The average UK first-time buyer has seen the initial cost of a mortgage deposit climb by 41% in the last decade, new market analysis by Barrows and Forrester has revealed.
This figure means that prospective buyers now require over £10,000 more to secure their first foot onto the property ladder.
Barrows and Forrester analysed the current cost of a deposit for a first-time buyer, based on 15% of the current first-time buyer house price. It then looked at how this cost has changed since 2012, calculating the cost of a deposit a decade ago after adjusting for inflation.
The research from the estate and lettings agent showed 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.
“The outlook is currently a very bleak one for those yet to secure that first foot on the property ladder,” said Barrows and Forrester managing director, James Forrester. “House prices have soared over the last 10 years, let alone during the pandemic, and so the initial financial hurdle of a mortgage deposit is far, far higher than it was in 2012.
“At the same time, earnings have failed to keep pace, 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.”
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