You are here: Home - First Time Buyers - News -

First-time buyer deposits falls to £24,637

Written by: Paula John
The size of the average deposit put down on a buyer's first property has fallen by 10% in the past 12 months.
First-time buyer deposits falls to £24,637

According to the latest First-Time Buyer Tracker from Your Move and Reeds Rains the average first-time buyer deposit fell by £2,700 in the year to May to £24,637. This represents 67% of a first-time buyer’s annual income, down from 77% 12 months ago.

The average property purchased by a first-time buyer cost £146,887, £9,000 more expensive than in May 2013.

David Newnes, director of Your Move and Reeds Rains, attributed the fall in deposit amounts to the government’s Help to Buy scheme.

He said:

“Savings rates have been stuck at rock bottom for over five years, wages are only just beginning to show signs of growth and the cost of living has been mounting all the while.

“Without Help to Buy, these stumbling blocks may have been too large for some prospective homeowners to overcome.”

The average loan-to-value of a first-time buyer was down 0.4 percentage points from April to 83.2% while mortgage rates had increased from 3.99% in April to 4.09% in May.

First-time buyer sales fell 4.5% as tougher lending criteria brought in with the Mortgage Market Review (MMR) began to bite, according to the report. House purchase approvals fell for the fourth consecutive month in May.

Newnes said the slowdown is most likely a temporary blip but there may be some more permanent side-effects now that Mak Carney has exercised his new powers over loan-to-income ratios.

He said: “MMR encourages the individual investigation of each application but loan-to-income caps are far more simplistic and could lead to a number of worthy first-time buyers missing out on a mortgage.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Six bank statement mistakes that can ruin a mortgage application

Being overdrawn and having a history of payday loans can be red flags to lenders when they...
Six bank statement mistakes that can ruin a mortgage application

Six in 10 don’t know when to negotiate on price during a property purchase

Love it or loathe it, understanding how to negotiate can be a valuable skill to have in th...
Six in 10 don't know when to negotiate on price during a property purchase

Get your head around mortgage fees

The mortgage fees associated with taking out and paying off a mortgage have tripled in the...
Get your head around mortgage fees

Guide to borrowing past retirement age

As an older borrower, you may be concerned that a lender will not offer you a mortgage pas...

Mortgage market biased against homeowners

Buy-to-let property investors are unfairly favoured in the mortgage market, an independent...

Should buy-to-let investors ‘go Dutch’?

The Netherlands is revealed as Europe’s top buy-to-let property hotspot

Private sector tenants in poverty double in decade

The number of private rented sector tenants in poverty has doubled in the last decade from...

Large mortgage broker firm launches with fees of over 1%

An insurance firm has launched a mortgage advice service

Second steppers targeting detached properties

Those living in their first home are increasingly looking to reduce the steps to their lon...

Mortgage Calculators