Single First Time Buyers Now Need £74,000 Deposit, Rightmove Says
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Brits looking to get on the property ladder by themselves for the first time would now need a deposit of £74,000 to buy the typical first home.
The possibility of buying your own home and leaving rented or shared accommodation behind appears to be becoming less and less likely for millions of people in the UK as a result of increasing house prices.
It should go without saying at this point that avocado toast and an extra pint at the pub are nothing to do with being able to afford a home, because the deposit needed to get a suitable mortgage has increased dramatically over the last 10 years.
The deposit figure comes from Rightmove, which looked at the example of a single buyer on the median wage being able to borrow a maximum of 4.5 times their salary to buy the average first-time buyer home costing £223,117. Wage figures were from the Office for National Statistics, and amounted to £31,980 today compared to £23,764 ten years ago.
With that in mind, Rightmove determined a typical first-time solo buyer would need to cough up a 34 percent deposit of £74,402 in order to get a mortgage with a typical lender and bridge the gap between the mortgage and the price of the typical first-time buyer home, which costs an average of £223,117.
To be clear, that's more than two years' wage even without taking tax into account.
Commenting on the findings, per the Mail Online, Tim Bannister of Rightmove said: "The next generation of first-time buyers currently need to raise a deposit that is more than 50 percent higher than ten years ago, while average salaries have only increased by 35 percent.
"That's before you factor in if you'll be able to get a mortgage, as right now if you're buying on your own you'd need a hefty deposit of more than 30 percent to be able to borrow enough to buy a typical first-time buyer home."
The finding comes as Boris Johnson announced a review into the mortgage market which aims to increase access to 95 percent loans for properties.
Bannister said a review would be 'greatly welcomed' if it could help with the issue of needing such a big deposit, adding: "It's clear to see why there are many renters keen to get on the ladder, as they're forking out 40 percent more each month than ten years ago, while low interest rates means average mortgage payments have only increased by 11 percent over that same time.
"Although competition among buyers is now starting to ease, we're still in a market where demand is massively outstripping supply in many areas of the UK. This has already pushed prices to record highs so the challenge for first-time buyers of raising a deposit is not going to get easier."
In the short term, Bannister has suggested more people are likely to turn to cheaper areas on the market in a bid to get on the property ladder.
Featured Image Credit: Alamy
Topics: UK News, Money, Boris Johnson, Politics
