People looking for their first contractor mortgage will know that lenders are asking for extortionate deposits, but did you realise that the average deposit has risen tenfold since 1990?
The average deposit now stands at nearly £66,000, according to new research from First Direct. In 1990, the average deposit was £6,793; now it is £65,924. During the same period, house prices have increased fourfold. The average loan to value in 1990 was 88% but today it has dropped to just 73%.
Bruno Genovese, First Direct’s senior savings product manager, said the average age of first time buyers is increasing and more and more people are struggling to get their first foot on the housing ladder. 2010 proved to be the hardest year for house buying in the past 20 years as the average house price reached more than six times the amount of the average household income.
Although a lot has been made of increased house prices, the average deposit needed to get a mortgage has increased more than twice as quickly as house prices and nearly four times as fast as income.
House prices did decrease in July, with homes in the West Midlands witnessing the biggest decrease at 4.6%. The only area which witnessed an increase was London where prices rose by 0.9%.
The average house price in the UK in July was £207,690 but that average drops to just £133,163 for buyers in the North East of England. At the other end of the spectrum, the average property in London is more than £200,000 more expensive at £347,271.
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