Average Deposit Required For First-Time Buyers Is Now £57,000
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First-time buyers are having to raise record amounts of money to secure mortgages as the average deposit soared by over £10,000 in the last year.
According to the Halifax bank's index, the average deposit for a house in 2020 was £57,278 - a rise of 23% from £46,449 in 2019.
Figures from the Office for National Statistics (ONS) show that UK average house prices surged to a high of £250,000 in November, with a peak of £500,000 in London.
The rise has been driven by high demand in the second half of 2020 following the break during the first lockdown as well as the temporary stamp duty holiday likely to have increased demand in the market.
The largest rises were seen in the capital, with properties costing £20,000 more on average than in 2019, and also in Wales, where the average first-time buyer deposit grew by 25%, climbing from £26,029 to £32,663.
However, despite the prohibitive price increases - as well as low-deposit mortgages being retracted due to coronavirus - first-time buyers still accounted for half of all home purchase loans in 2020, slightly down from 51% the previous year.
According to Halifax, there were 304,657 first time buyers in 2020, the lowest number since 2015, and down around 46,000 from 2019, with the biggest drops seen in Wales, Northern Ireland and Scotland.
Russell Galley, managing director, Halifax, said: "Whilst these figures confirm the almost inevitable fall in the overall number of first-time buyers in 2020 - with the entire housing market effectively shuttered during the first national lockdown - they also underline just how strong the bounce back was in the second half of the year.
"Despite the obvious challenges presented by soaring house prices, not least the need to raise an even bigger deposit, first-time buyers still accounted for half of all home purchases, a reassuring statistic given their overall importance to the market.
"However, with the economic impact of the pandemic likely to be felt most keenly by the young and those in lower-paid jobs, the need to prioritise improved housing availability and affordability for all those looking to make that first step on to the property ladder becomes ever greater."
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