Average deposits rise to over £70,000
Average deposits rose in nine out of 11 regions in October, to reach £71,301, according to research from Mortgage Advice Bureau.
This represents a monthly increase of 0.9% and an annual rise of 3.5%.
East Anglia saw the largest monthly increase in average deposits which rose by 11.6% month-on-month from £46,504 to £51,877. At the same time, typical loans in the region decreased (from £132,325 in September to £125,039), suggesting borrowers are putting forward more of their own funds as house prices rise.
Average deposits remain highest in London, where they have risen from £170,328 in September to £179,248: an increase of 5.2%.
However, help for first-time buyers in the capital is coming in the form of the recently announced London Help to Buy scheme. The initiative gives buyers with a 5% deposit an equity loan of up to 40% of the value of a new build home, interest-free for five years. Based on London’s average house price in October (£533,922), this means borrowers in the capital would pay a more affordable £26,696 deposit.
The Help to Buy equity loan scheme for the rest of the country – offering a 20% equity loan – has also been extended until 2021 to help first-time buyers struggling to save for a deposit outside of the capital.
Brian Murphy, head of lending at Mortgage Advice Bureau, said: “George Osborne’s Autumn Statement hammered home the Government’s support for homeownership, with several policies aiming to improve both the supply and affordability of homes.
“This is sorely needed in the capital, where house prices remain much higher than in the rest of the country and saving up for a deposit can seem an impossible task. However, with average deposits rising across the UK, support is needed nationwide.”