First-time buyers are forking out as much as £53,414 on average to get on the property ladder, the latest figures from lender Halifax reveal.
This amount fell by £9,057 last year – as the typical price paid by first-time buyers also dropped by £13,869 to £288,136.
But how much buyers are paying varies wildly depending on where you are in the country.
Search for your local authority in our table below to see how much first-time buyers are putting down as deposits in your area and how much they are typically paying for their home. The data is compiled by Halifax from its own figures, as well as those from Lloyds Bank and Bank of Scotland, which are part of the same group.
Where first-time buyers need the most and least
Not surprisingly, London is still one of the most expensive places to get a foothold in the market. If you want to buy in Westminster then an eye-wateringly high deposit of £159,348 may be required for that £677,663 bolt hole, which may only buy a modest one or two-bedroom flat.
Outside of the capital, some of the best prices can be found in the North East, such as the town of Middlesbrough. Here, first-timers pay an average of £154,448 and require a much lower deposit of £27,225.
This can buy you a three-bedroom, semi-detached house. A year ago, first-time buyer properties in Middlesbrough averaged considerably lower at £172,665 with a £31,302 deposit.
On the ladder… for less: Typical house prices and deposits for first-time buyers went down last year, according to Halifax
Philip Mount, of the East London-based estate agency Churchill Estates, says: ‘There is a dearth of supply for first-time buyers that is keeping prices high. Unfortunately, these days most people need parental support – some help from the bank of mum and dad – to get a foot on the property ladder.
‘Young people can end up paying £1,200 a month to rent a studio apartment in the capital. So, they struggle to have enough spare cash to save up for a first home deposit.’
The Halifax research reveals in London the average first time buyer deposit is £108,848 for a £492,234 home. Five years ago, before the pandemic, it was £110,109 for a £422,006 London first home.
Mount says: ‘The slight fall in the amount required for a deposit can only be good news. We hope this will be a better year with early indications mortgage rates will fall if we get a grip on inflation and the Bank of England lowers base rates. As a General Election year there may also be tax giveaways in the Spring Budget that could boost the housing market.’
A two-bedroom ground floor flat in a Victorian house in Wanstead, East London, is on sale for £500,000
What first-time buyers get for the money
First home opportunities currently available through Churchill Estates include a two-bedroom ground floor flat in a Victorian house in Wanstead, East London, for £500,000 and a two-bedroom terraced period property in nearby Woodford, Essex, which is priced at £475,000.
In contrast, property searches in Middlesbrough revealed homes for sale through estate agency Clarke Munro found similar properties at much lower prices. For example, a two-bedroom terraced house might be purchased for £85,000, while for £155,000 you can buy a three-bedroom semi-detached house.
For £450,000 you can purchase a modern three-bedroom detached bungalow or four-bedroom semi-detached family house.
The research by Halifax found that the lowest deposits required are in the North East, having fallen 3 per cent over a year.
The biggest fall for the amount of deposit required to buy a house was 16 per cent in the East Midlands, at £36,139.
In the city of Leicester, the average first-time deposit for a £244,995 home is £41,447. In the previous year first-time buyers were handing over £3,032 more as a deposit in Leicester despite the average price being not much less at just £244,379.
Kim Kinnaird, director of Halifax Mortgages, says: ‘The fall in house prices last year will go in some way to helping people get on the property ladder for the first time. But these buyers are still dependent on a supply of homes – and face the continued pressure of saving for a deposit.’
She adds: ‘Despite the number of first-time buyers falling to around 293,000 last year, they still accounted for 53 per cent of all the home loans that were agreed. To afford to buy a property, 63 per centof completions were made in joint names – the purchase being shared among two or more people. This is up one percentage point on the previous year.’
According to the Halifax analysis, the average first-time buyer is aged 32 – up from 30 a decade ago – and the properties purchased are 6.7 times the average UK salary of £43,257 a year.
Terraced homes are the most popular properties for first-time buyers, accounting for 30 per cent of first homes snapped up. But due to affordability, flats are often the first property bought. In expensive regions, such as London, they account for more than two-thirds of the first-time homes purchased.
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