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Ft: Average Deposit Up 50% Since 2007

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http://www.ftadviser.com/FTAdviser/Mortgages/Products/FirstTimeBuyers/News/article/20110520/7b3d2146-82bc-11e0-8cd9-00144f2af8e8/Average-deposit-up-50-since-2007.jsp

First-time buyers are being forced to make larger downpayments on mortgages, with Council of Mortgage Lenders (CML) data showing that the average deposit is currently 15 per cent, 50 per cent higher than the 10 per cent average in 2007 prior to the market crashing.

However, this figure remains below the long-term average, with data from Santander showing that first-time buyers have paid an average 17 per cent deposit during the last 12 years.

Santander's research also show that it has taken an average of 29 months to save for a deposit on a first home.

Some 17 per cent of first-time buyers over the past 12 years have paid between six to ten per cent deposit on their first home, with 12 per cent putting down between 11 and 20 per cent.

Surprisingly, one in ten paid almost half of the full property price as a deposit with a further 15 per cent buying the property outright.

Around 43 per cent of first home owners counted the pennies and used their savings to get on the property ladder. A further eight per cent used inheritance and six per cent used financial help from their parents. One in 20 sought additional work while four per cent took out a loan.

Phil Cliff, director of Santander Mortgages, said: "Despite the availability of 5 per cent deposit mortgages throughout most of the noughties, first time buyers opted to put down an average of 17 per cent deposit to secure their first home - over two per cent more than the average deposit currently paid now. The majority have done so via the ‘traditional' route of savings."

Santander itself has just launched a two-year fixed Homebuyer product at 90 per cent LTV, at 5.29 per cent with £495 upfront fee.

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I find this article confusing since:

First-time buyers are being forced to make larger downpayments on mortgages, with Council of Mortgage Lenders (CML) data showing that the average deposit is currently 15 per cent, 50 per cent higher than the 10 per cent average in 2007 prior to the market crashing.

Are the CML saying that the average deposit is 15% or are they saying the average deposit from FTBs is 15% ?

Because:

a further 15 per cent buying the property outright.

I can't see 15% of FTBs buying outright.

So if you exclude outright purchases, which skews the average deposit required, what is then ?

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I can't see 15% of FTBs buying outright.

So if you exclude outright purchases, which skews the average deposit required, what is then ?

dont forget that 'FTB' would include someone from overseas (expat returning or rich immigrant) buying outright. If I ever came back and bought, I'd count as a FTB even though I have owned property before....

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First-time buyers are being forced to make larger downpayments on mortgages

Is that different from "No longer able to get away with ridiculously high LTV mortgages"?

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http://www.ftadviser.com/FTAdviser/Mortgages/Products/FirstTimeBuyers/News/article/20110520/7b3d2146-82bc-11e0-8cd9-00144f2af8e8/Average-deposit-up-50-since-2007.jsp

Around 43 per cent of first home owners counted the pennies and used their savings to get on the property ladder. A further eight per cent used inheritance and six per cent used financial help from their parents. One in 20 sought additional work while four per cent took out a loan.

Well that's reasuring!

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First-time buyers are being forced to make larger downpayments on mortgages

I would say that is a good thing......better than 110% NR mortgage, 100% mortgage or 90% mortgage with a 10% loan. ;)

Edit to say: If you can't afford to save for a deposit, you can't afford to pay a mortgage......while you save you no longer will be missing the boat, a bigger better boat is on its way sailing into dock.

Edited by winkie

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I can't see 15% of FTBs buying outright.

So if you exclude outright purchases, which skews the average deposit required, what is then ?

Cash purchasers don't have a mortgage, so they're already excluded from the figures.

I can see 15% of FTB's buying outright, in most cases with money from their parents. Currently over 40% of all house purchases are by cash buyers, in parts of London and the South-East cash purchases have been put at 60-80%, so it doesn't seem too much of a stretch that 15% of FTB's are cash buyers.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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