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Britain’s booming house market sees deposit costs for FTB escalate

Recently a study was done and revealed by Stipendium, the platform that simplifies life’s complex events such as home moving, that the average cost of a mortgage deposit on a first home has seen a significant escalation of 54% in the last 10 years, thus further increasing the gap between homeownership and the nations’ first-time buyers.

What the research shows

According to the analysis done by Stipendium, there are a number of factors that have influenced the costs that first-time buyers face when it comes to a mortgage deposit and research shows that a decade ago, the average first-time buyer was only obligated to place a deposit of 17% in order to secure their first home. This means that the average first-time buyers’ house price equated to £138,973, with a mandatory deposit of £23,625-£29,684 once adjusted for inflation.


Another analysis was done on the level of deposit required from the average first-time-buyer five years down the line and it had fallen to 16%, which seems marginal, however, with the average first property costing £181,440, the UK’s first-time buyers were seeking a mortgage deposit closer to £29,030-£32,495 once adjusted for inflation.

This study thus shows that the initial financial hurdle of securing a first home has climbed by 9% in five years, tallying up to an increase of just £2,811. Fast forward to today and you’ll expect to see a required 20% deposit placed by first-time buyers, with the average first home costing £227,846, which equates to a considerable £45,569. Even after adjusting for inflation that would still amount to a 40% increase in the last five years alone and a 54% increase in the last decade.

Chief executive officer of Stipendium, Christina Melling, concludes: “Record house price growth means that the initial requirement of a mortgage deposit has climbed substantially over the last decade and the vast majority of this increase has been seen in the last five years alone.”

“While this increase will have been felt by homebuyers at all levels of the market, it’s been particularly hard on first-time buyers who are just starting out on their journey to homeownership and who won’t have the financial backing of a previous property in order to cover their mortgage deposit costs.”

“It really does beg the question as to where it will stop? We’ve only seen one notable market realignment in the last two decades and house prices have since surpassed previous peaks to reach new highs, which has severely reduced the chance to buy for many aspirational homeowners.”

“The UK property market is a tough place to be for first-time buyers and this was largely our motivation behind launching our Merge platform. We wanted an affordable resource that can provide help, support and guidance throughout the duration of the transaction process, while also providing them with as many cost-saving opportunities as possible.”

Britain’s booming house market sees deposit costs for FTB escalate


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