Legal News
Average Homebuyer’s Deposit Witnesses Tenfold Increase in Two Decades (19 September 2011)
Date: 19/09/2011
The average deposit for a UK homebuyer has increased tenfold over the last two decades, revealing the difficulty first-time buyers face to step on to the property ladder. Recent research has found that the average deposit for a homebuyer has increased from £6,600 to a staggering £66,000 since 1990. The increase is blamed on increasing house prices and mortgage level reductions. The average household income, meanwhile, has only increased 2.3 times over the same period, meaning that prospective homebuyers are required to save for longer.
Bruno Genovese, First Direct’s Senior Savings Product Manager, claimed that over the last two decades, 2010 was the most difficult year to purchase a home. The average purchase price of a house is currently 6.3 times the average household income, with the average deposit 1.7 times the average income. Mr. Genovese named 1995 and 1996 as the easiest years during which to purchase a home. During this time, the average purchasing price was 3.4 times the average household income, and the average deposit just 0.3 times the average income.
Mr. Genovese emphasises that while rising house prices are a common complaint for prospective first-time buyers, the average deposit has risen more than twice as quickly as house prices and almost four times as quickly as household income. Mr. Genovese explains that this is the reason why first-time buyers are increasing in age. The average age of a first-time homeowner has increased to 35. The average age of a first-time homeowner in the early 1960s was just 23.
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