First-time Buyers
First-time buyer deposits hit new high
The amount of cash first-time buyers must raise as a deposit has hit an 18 month high, according to new figures.
A first-time buyer tracker from estate agencies Your Move and Reeds Rains showed a typical new buyer needed a deposit of almost £30,000 in January.
This figure is 15% higher than a year ago with the firm blaming stamp duty changes for the sharp increase.
The government replaced the previous ‘slab structure’ stamp duty tax in December with a more progressive system.
Across the UK the average first-time buyer house purchase price passed £160,000 for first time on record.
January first-time buyer completions fell 19% compared to the previous month, something the report said was due to a lower number of applications over the Christmas period.
Adrian Gill, director of estate agents Your Move and Reeds Rains, said: “A fusion of economic factors is alleviating some of the financial burden of forming a deposit. Wages are starting to recover and inflation has fallen to a record low, meaning buyers have slightly more cash to play with day-to-day.
“And stamp duty fees were slashed for many new buyers when the government reformed the old slab system, freeing up further funds. It’s still difficult to save – with savings rates tied closely to the low base rate. But it’s easier to put cash aside than it was a year ago.
“However, property prices have pushed a new record for first-time buyers, meaning these extra funds are being diverted directly into larger deposits. Putting together a deposit to buy a property remains one of the most arduous tasks for prospective home-buyers, and schemes like Help to Buy are essential to allow the swathes of buyers reliant on higher LTV mortgages to get onto the housing ladder.”