The average deposit for first time buyers hits a record high

The average first-time buyer deposit reaching £46,187 in 2019. This figure is seven per cent higher than the average deposit of £43,155 in 2018.

We’ve been hearing for some time about the challenges faced by those trying to get on the housing ladder, and according to new research by Halifax, things aren’t getting any easier, with the average first-time buyer deposit reaching £46,187 in 2019. This figure is seven per cent higher than the average deposit of £43,155 in 2018.

And it’s not just deposits that buyers need to save for. The average house price paid by first time buyers had risen by nine per cent in the last year from £213,203 in 2018, to £231,455 in 2019.

Rebecca Knight wrote in Ideal Home: “Unsurprisingly, first-time buyers in London faced the most eye-watering deposit at £109,885. While in the North East of England, first-time buyers had it slightly easier, only needing to put down an average of £24,091.

“However, despite the rise in house prices, the number of people buying their first home has increased. But only by around one per cent, going from 353,130 in 2018 to 356,767 in 2019. In Northern Ireland, the number of first-time buyers increased by an even larger amount. It jumped up 6 per cent, going from 10,430 to 11,013.”

Overall, first-time buyers now account for more than half of all house purchase mortgages.

Back in 2018, Sales Manager at Advantage Structural Warranty, James Topping wrote a feature for PBC Today, predicting that steep deposits and rising house prices would usher in a new era for the private rental sector, stating: “Statistics from 2016-17 showed that the private rental sector accounted for 20% of households in England – in other words, 4.7m properties. Growth began to accelerate around 2006-07 and is showing no sign of abating. In fact, it is predicted that the sector will grow a further 24% by 2021, meaning that one in four people will be renters rather than owners.

“With such a large proportion of people renting, it’s imperative that developers design schemes in which tenants are safe, comfortable and happy. For this reason, build-to-let developments especially are designed with renters in mind. They often feature concierges, bicycle storage and communal areas with pool tables, fully stocked bars and coffee machines.

“Gone are the days of mouldy shower curtains, broken furniture and impossible-to-reach landlords. In build-to-rent, renters are king as developers seek to eschew the traditional “transactional” nature of a landlord-tenant experience and replace it with a relationship-first dynamic – where occupiers are treated more like customers.”

According to Diversified Property, demand for private rented property is set to continue to grow in 2020, in line with James Topping’s predictions. However, they note: “An increasingly pertinent point is whether there will be enough rental accommodation to house this considerable demand, especially given the recent tax relief changes which have proved detrimental for many buy-to-let investors.”

Advantage Structural Warranty’s take-away: With both rental and mortgage applications strong at the start of 2020, expect to hear a lot more about how we can meet the nation’s housing needs, creating high quality housing for those renting and buying, over the coming months.

Related read: Renting for life? Why renting could be the new buying.

Interested in learning more? Contact one of our structural warranty experts today to discuss your requirements on 0845 900 3969

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Advantage Home Construction Insurance (AHCI) provides structural defects insurance – operating nationally with offices in Warrington, London and Birmingham – offering development-related insurances and a service designed to give customers peace of mind.

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