Fat Figures: Average house deposit over £65k while FTBs pay 558% more than parents
Walking past a high street bank, a poster caught my eye: lowest fixed rate mortgages in decades. To an unsuspecting novice, this bold statement may raise excitement levels. However, to the weathered professional, the poster is little more than window dressing. While rates may be the low, deposits continue to skyrocket.
According the research by First Direct, the average deposit required by a homebuyer has increased tenfold in the last 20 years. A homebuyer now needs an average deposit of £65,924, compared to the £6,793 required in 1990¹.
The staggering increase is made even more substantial when you consider household incomes less than tripled over the same period. In the last two decades, 2010 appeared to be the most difficult time to buy a house as average house deposit was 1.7 times bigger than the average household income.
But no one is struggling more than the first time buyer. A standard deposit for an FTB is now £31,474 – over £10,000 more than the total cost of a first time buyer’s property thirty years ago.
A study by Safe Home Income Plans (SHIP) has revealed first time buyers now have to pay 558 per cent more for their first property than their parents did.
In 1983, the average first time buyer property cost £20,810; the average first time buyer property now costs £136,842, an increase of 558 per cent.
Andrea Rozario, Director General of SHIP, said:
“These housing figures really highlight the struggle that young people now face to take those first steps onto the housing ladder. House prices have risen far faster than incomes have done since the older generation bought their first homes.”²
Content correct at time of publication