House prices: average deposit now £66,000
The average homebuyer's deposit has risen tenfold in the last twenty years, showing the increasingly difficult task first-time buyers face to get on the property ladder.
Research from bank first direct found that the average deposit has leapt from £6,600 to £66,000 since 1990 due to increasing house prices, and a reduction in mortgage levels. The average household income has risen 2.3 times in the same period, meaning that people must save for far longer to buy a home.
Bruno Genovese, Senior Savings Product Manager from first direct - part of HSBC - said that 2010 was the most difficult year to buy a house in the last twenty years. The average house price is 6.3 times the average household income, and the average deposit is 1.7 times the average income. In 1995 and 1996 - the easiest years to buy a home - the average deposit was 3.4 times the average income, and the average deposit was 0.3 times the average income.
"Much has been made of rising house prices, but the average deposit needed in the first place has actually risen more than twice as fast as house prices and almost four times as fast as income," he said. "This is why we are seeing first time buyers getting older, with more and more people struggling to get on the property ladder."
The average age of a first-time buyer has risen to 35, and over half of those who are not on the property ladder think that they will never be able to afford to buy a home, according to recent research from Post Office mortgages. In contrast, those who bought their first home in the early 1960s were on average just 23 years old.
