First time home buyers need £53k cash deposit as house prices march higher

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First time buyers need to seek out greater than £50,000 for a deposit, new figures reveal, as the nation’s housing disaster exhibits little signal of abating.

In its newest housing index, lender Halifax stated that the typical house value jumped by £3,785 month on month in January – which is the fourth month in a row of will increase.

The value improve takes the typical house value to £291,029.

High rates of interest and rising house prices have mixed to drive homebuyers to hoard ever extra cash. The common family should save for 10 years to collect the required cash.

The common deposit for a primary time purchaser is an eye-watering £53,414 – round 19% of the acquisition value.

Kim Kinnaird, director, Halifax Mortgages, stated: “This is the fourth consecutive month that house prices have risen and, as a result, the pace of annual growth is now 2.5%, the highest rate since January last year.

“The recent reduction of mortgage rates from lenders as competition picks up, alongside fading inflationary pressures and a still-resilient labour market, has contributed to increased confidence among buyers and sellers. This has resulted in a positive start to 2024’s housing market.

“However, while housing activity has increased over recent months, interest rates remain elevated compared to the historic lows seen in recent years and demand continues to exceed supply.

“For those looking to buy a first home, the average deposit raised is now £53,414 – around 19% of the purchase price. It’s not surprising that almost two-thirds of new buyers getting a foot on the ladder are now buying in joint names.

“Looking ahead, affordability challenges are likely to remain and further modest falls should not be ruled out, against a backdrop of broader uncertainty in the economic environment.”

In evaluation printed final week the morgage lending large stated that just about two-thirds of individuals taking their first step on the property ladder are doing so with another person.

It stated that some 63 per cent of first-time purchaser mortgages taken out between January and December 2023 have been in joint names, involving two or extra individuals, indicating individuals are

Escalating prices implies that 63 per cent of first-time buyers are anticipated to obtain assist from the ‘bank of mum and dad’ to get on the housing ladder.

According to Savills the monetary contribution totalled £8.8 billion in 2022, a rise of virtually £4billion since 2019, which is a results of the extra stringent mortgage market and higher desposits wanted.

If you don’t have the luxurious of getting dad and mom capable of lend you or provide you with any cash then you’ll have to save your self.

According to the ONS the median annual earnings within the UK is £34,963. If you managed to save lots of £450 every month from that wage it might take you round 10 years to save lots of up for a deposit.

This is in keeping with analysis from Generation Rent final 12 months who stated it might take 9.6 years to save lots of up for a deposit. The marketing campaign group stated the worst impacted space is London, the place it might take you an astonishing 18.3 years to save lots of up for a deposit.

The common first time deposit of £53,414 is decrease than the typical deposit of £62,471 in 2022, however significantly higher than the quantity in 2018, £44,411 and 2013, £32,031.

Average house prices adopted by the annual change, based on Halifax:

East Midlands, £236,862, 0.5 per cent

Eastern England, £327,270, minus 2.0 per cent

London, £529,528, minus 0.4 per cent

North East, £169,505, 2.0 per cent

North West, £229,707, 3.2 per cent

Northern Ireland, £195,760, 5.3 per cent

Scotland, £206,087, 4.0 per cent

South East, £379,220, minus 2.3 per cent

South West, £295,399, minus 1.4 per cent

Wales, £219,609, 4.0 per cent

West Midlands, £251,185, 0.7 per cent

Yorkshire and the Humber, £207,602, 2.8 per cent

Additional reporting by PA