Help to Buy deposits on the rise
Data from Mortgage Advice Bureau showed the typical buyer using the scheme in February needed a deposit of £9,936. This represents a 9.2% increase on the £9,099 recorded in January and is more than £2,000 above the £7,856 seen in November 2014.
However it still remains some way from the peak of £11,438 in April 2014.
The firm expects the upcoming Help to Buy ISA to help alleviate the deposit issue. Announced in the Budget earlier this year, the saving scheme will see government contributing £50 for every £200 saved by first time buyers, up to a maximum of £12,000.
At current levels, a first-time buyer making full use of the scheme could reach the necessary deposit in 20 months, five ten months faster than if they were saving on their own.
Brian Murphy, head of lending at Mortgage Advice Bureau, said the scheme remained an important part of the mortgage market.
“Help to Buy’s importance to easing affordability pressures is plain to see: the average deposit of those using the scheme remains far below those found in the wider marketplace, giving first time buyers access to the housing market in a far shorter timescale than would otherwise be possible without parental help,” he said.
“The Help to Buy ISA will provide a further boost to first-time buyers, with the government effectively pledging to contribute a fifth of their deposits up to £15,000. By paying a modest 10% of their savings after tax into a Help to Buy ISA, a couple would be able to reduce the time they need to save for a deposit by as much as nine months.
“The arrival of the new ISA scheme will be another step towards make homeownership a realistic goal for first-time buyers on average incomes.”