Prospective homeowners across the UK are confronting a significant financial barrier, with new analysis revealing the typical first-time buyer now requires a deposit of around £23,000. This substantial sum highlights the ongoing affordability crisis within the property market, even as house prices show signs of softening.
The Great British Deposit Divide
The challenge is far from uniform, exposing a stark geographical divide. Based on saving 10% of the average net income, accumulating a standard 10% deposit takes a prospective buyer nearly six years on average. However, in the capital, the hurdle is dramatically higher. London's first-time buyers are looking at an average deposit of approximately £44,800 – a figure roughly three times larger than the amount needed in Scotland or parts of northern England.
This translates to a gruelling nine-year saving journey for those hoping to buy in London. In stark contrast, buyers in the North East face a more manageable typical deposit of £13,100, which could be saved in about four years under the same conditions. This regional disparity underscores the uneven landscape of the UK housing market.
How Buyers Are Bridging the Gap
Faced with these daunting figures, many aspiring homeowners are turning to alternative methods to boost their savings. Government-backed initiatives like the Lifetime ISA remain a popular tool, offering a bonus on contributions. Perhaps more crucially, the 'Bank of Mum and Dad' (and friends) continues to play a vital role. In the 2024-25 period, over a third of all first-time buyers received crucial financial assistance from family or friends to help them onto the property ladder.
Market Struggles and Future Outlook
The property market is currently navigating a period of adjustment. Reports indicate UK house prices are falling, with the market ‘struggling’ following recent changes to stamp duty. While experts anticipate a gradual strengthening of the market and an improvement in affordability over time, significant pressures remain for new entrants.
Even after securing a deposit, mortgage payments present a severe challenge, particularly for those in certain employment sectors. For some, monthly repayments are consuming around 50% of their take-home pay, leaving little room for other living costs or financial shocks. This high burden underscores that the deposit is just the first of many financial obstacles facing first-time buyers in today's market.
