It is extremely difficult for first time buyers to enter the housingmarket and unfortunately, it is only set to get more difficult. The price for house deposits are set to sky rocket over the next decade. The worst affected areas will be London and the South of England. With Edinburgh, Glasgow and the North of England will still have to pay much more than they do now. It is a struggle for first time buyers to save for a deposit on a property. It seems things are not going to get easier.
The UK average deposit for first time buyers currently averages £29,682. After a predicted 20% rise, first time buyers will have to pay £35,528 by 2022. This will rise again by 18% in the following five years. Generally, if this increase continues first time buyers in the UK will need to pay up to 28% of the property value as a deposit.
The total UK increase of house deposits has been heavily influenced by the intense upsurge of prices in London. Already, first time buyers in the city must pay an average of £140,000 – the highest deposit required in the UK. In 2027, they are maybe looking at up to £250,000 just for the deposit. This is the sharpest increase of all and will hit first time buyers the hardest. Brighton and Hove will follow, with predictions suggesting that first-time buyers in the area will be expected to pay £125,280. This is 62% more than the current average deposit of £77,407.
Further afield, first time buyers in the North are estimated to pay deposits of up to 41% by 2027, an average £41,755. For potential homeowners in Glasgow, the average deposit will increase by 48% to £32,291. First time buyers in Edinburgh will pay even more. Deposits in Scotland’s capital are set to rise by 55% to £58,204. Property deposits in the North of England and Scotland may be minimal compared to prices in the South of the country, however it is still a large amount for first time buyers to accumulate.
Although it is getting progressively harder to save for a deposit, first time buyers are still doing just that: 44% of all first-time buyers plan to use their own savings; Another 15% will seek assistance through a Help to Buy ISA whilst 11% are expected to obtain a sum from their parents.
Pulling together enough money for a house deposit is one of the hardest tasks faced by first time buyers. This isn’t surprising considering the current housing market. The increase in property deposits appear daunting and may cause first time buyers to avoid properties in and around London as prices become increasingly steep. There are various schemes that can aid in obtaining a property. Buying a house is certainly not impossible but it is sadly getting more difficult.