New research has found that the average house buying deposit that a first time buyer is £51,821. If house prices continue to rise, the average deposit will go up.
Some areas of the UK have cheaper properties. In Edinburgh, the average first-time buyer deposit is £37,661 and in Norwich, it is £40,890.
There are mortgages available at 95% of the property price, but interest rates are high on these mortgage deals. First-time buyers often choose to wait until they have a larger deposit.
First-time buyers expect that 44% of the deposit will come from their savings, 21% from Help to Buy and Lifetime ISAs. Many people are relying on parents or an inheritance to contribute to a deposit.
On the positive side, mortgage rates are low, and the government has scrapped stamp duty on the purchase of first houses worth up to £300,000. Help to Buy and Lifetime ISAs can boost deposits. The government is encouraging more new houses to be built, but there is a shortage of affordable housing for first-time buyers.
As houses and deposits rise, many people are forced to rent their accommodation for longer periods whilst they save for a deposit. Rents have risen in recent years, which means that tenants have less money to save each month.
Buy-to-let landlords generally have no difficulty finding tenants. Buy-to-let commercial mortgages provide finance to purchase property to supply the high demand for privately rented accommodation for people saving up to buy a home.
