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Housing Deposits Rise Tenfold

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The average deposit required to buy a house in the UK has increased tenfold to almost £66,000 since 1990, new research shows.

Deposits have grown at more than double the rate of house prices, making it harder for millions of Britons to get a foot on the housing ladder.

The amount of money required for a deposit is spiraling because mortgage companies have cut back on the amount they are willing to lend. As a result first-time buyers are having to save for longer to be able to afford a downpayment on a house. First time buyers getting older, with more and more people struggling to get on the property ladder.

According to First Direct, the average deposit required to buy a house in 1990 was £6,793. This has risen to £65,924 this year, an increase of almost ten times. Over the same period house prices have risen fourfold, meaning that a buyer needs to pay a far greater proportion of the total cost upfront as a deposit.

In 1990 the average percentage of a house price that a buyer could borrow as a mortgage the so-called loan-to-value rate the 88 per cent. That figure today is just 73 per cent.

Mr Genovese said that 2010 was the most difficult year to buy a house in the last 20 years, with the average house price over six times higher than the average household income.

He said: “Much has been made of rising house prices, but the average deposit needed in the first place has actually risen more than twice as fast as house prices and almost four times as fast as income.”

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  • 343 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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