This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
The average residential property purchase deposit is now £72,302, suspected to be a record high.
The latest data from the Mortgage Advice Bureau (MAB) reveals that buyers were paying substantial sums in May; the highest figure since the MAB began recording the data in March 2009. The previous peak of £71,474 was recorded in June 2014.
Home Deposits at a Record High of £72,000
In May 2014, borrowers took out an average loan of £161,887 and put down an average deposit of £69,238. Deposits are now £3,064 higher than a year ago.
According to the research – surveying over 600 brokers and 900 estate agents – average loans also reached record heights in May. The average loan size has now risen for four consecutive months.
Generally, homebuyers in May applied for loans of £167,842, up from the previous high of £166,141 in April 2015.
The new data, which includes buy-to-let mortgages, will come as bad news to first time buyers, who are paying record high rents and having to save more for a deposit.
The MAB says that the issue is “concerning” and the impending Help to Buy ISA will not help much on its own. The ISA will give individual first time buyers a tax break of up to £3,000 on £12,000 of savings for a deposit.
The MAB’s Head of Lending, Brian Murphy, comments: “Measures introduced to the mortgage market since the recession mean there are multiple checks and balances to ensure that people do not borrow beyond their means.
“Thanks to recovering house prices, many existing homeowners have extra equity in their properties and can balance their borrowing commitments with a significant stake of their own.
“Putting up a 30% deposit helps to unlock some of the best rates on the market and helps keep mortgage payments even more affordable. The rise of deposits is less encouraging for first time buyers, but there is at least some hope that more low cost properties will become available as second and third-steppers make their move up the ladder.”
Murphy continues: “The range of affordable schemes to support first time buyers will soon be boosted by the arrival of the Help to Buy ISA. All the same, the savings scheme will not be enough on its own to solve the long-term issues that are driving up prices and deposits across the market.”1
Em is the Content Marketing Manager for Just Landlords, with over five years of experience writing for insurance and property websites. Together with the knowledge and expertise of the Just Landlords underwriting team, Em aims to provide those in the property industry with helpful resources.
When she’s not at her computer researching and writing property and insurance guides, you’ll find her exploring the British countryside, searching for geocaches.
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