Average house deposit passes £80k

Average house deposit passes £80k

A new report from Mortgage Advice Bureau has claimed that the average house purchase deposit rose to over £80,000 in December - this is the highest figure recorded by MAB's National Mortgage Index since it began in January 2009.

The typical purchase deposit rose by 15% annually to reach £81,721 in December. At the same time, the average purchase price for a property in December rose to £252,990 from £231,487 one year earlier: a 9.3% annual increase.

However, borrower behaviour also played a role in rising average deposits. The typical buyer’s LTV fell to 68.2% in December, representing an annual decrease of 1.1 percentage points and the lowest level seen since June 2010.

Brian Murphy, head of lending at Mortgage Advice Bureau, commented: “An inevitable repercussion of rising house prices is that higher deposits are required. Those who cannot afford to put up more may find their choice of properties limited. However, those who were able to make a house purchase in December opted to pay a larger amount upfront by taking out a loan with a lower LTV. There are significant benefits to borrowing a smaller proportion of the purchase price, as rates and monthly repayments will be lower.  

Demand in the housing market is yet to come off the boil, despite the current dearth in property supply. As a result house prices are likely to continue rising this year, bringing about affordability concerns which will particularly affect first-time buyers.  A significant boost to the construction of new homes is needed to prevent some buyers being priced out of the property market.”


As deposit sizes rose, December marked the third consecutive month of worsening affordability based on the average purchase buyer’s income as a percentage of property prices. This proportion stood at 15.3% in December following a 2.0 percentage point annual decline from 17.3% in December 2014, as house price growth overtook average salary increases.

Mortgage Advice Bureau recorded a 2.9% fall in the average salary of homebuyers from £39,983 in December 2014 to £38,820 last month. In contrast, house prices rose by 9.3% from £231,487 to £252,990 over the same period.

Brian Murphy added: “The fall in average salaries over the past year suggests those with slightly lower incomes are still able to access the housing market, despite the significant rise in house prices. This has been helped by rock bottom mortgage rates, which have fallen steadily over the past year. However, these low rates won’t last forever, and if prices continue to rise faster than wages those with lower incomes may find it more of a challenge to become homeowners.

Government initiatives such as more affordable housing and the Help to Buy schemes go some way in helping those who are finding it difficult to fund a house purchase. However, income and house price growth needs to be more aligned to make homeownership a more realistic dream.”  

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Latest Comments

Oliver Conway
Oliver Conway 18 May 2017

Making a neat inventory is a good idea, but if the seller is not willing to provide it, can the buyer demand it?

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Bertrand
Bertrand 17 May 2017

First step to nationalisation of the private rented sector IMHO. Nanny state poking their noses into things yet again. I object, as a decent landlord, sometimes having to deal with some pretty awful tenants,...

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Izzy
Izzy 16 May 2017

This is such a great a post. I love the detail you've gone into. It's a very useful article for helping those who are looking at deciding which sector they would like to go into! When I first started investing...

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paul burnham
paul burnham 30 Apr 2017

Jeremy Corbyn's pledge that a Labour government would build 500,000 new council houses must electrify the general election campaign. Reliance on markets and the profit motive has brought huge housing-related...

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CommercialTrust
CommercialTrust 28 Apr 2017

Sadiq Khan?s announcement of an online database of landlords and letting agents who have been convicted of housing offences, appears on face value to be a variation of the already implemented Database

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warren
warren 26 Apr 2017

You're very welcome Mary! Glad you enjoyed them :)

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Mary Ward
Mary Ward 26 Apr 2017

Thank you for the wonderful ideas. First impressions can make or break a deal. It's sadly that many homeowners drop the kerb to create an off-street parking space.

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Tony Gimple
Tony Gimple 14 Apr 2017

I'm not at all surprised that so many landlords are still confused about what the tax changes really mean and how it will affect them. In particular, the blind rush to incorporation is leaving landlords...

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MH
MH 13 Apr 2017

You are right that the bank holidays are going to be spoiled in looking for the properties. But people who want to sell their property and looking for the better relocation, they can get benefits of this...

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bnellyb
bnellyb 08 Apr 2017

There will be an exodus of private landlords over the next 5 years as tax changes take effect, private landlords provide an important service to the rental market, why do housing associations and councils...

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Fred Cassman
Fred Cassman 07 Apr 2017

"Make it look like you are at home": often people forget this and share on facebook their location!

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jared townsend
jared townsend 05 Apr 2017

It'll be interesting to see how & if the Government's asset sale regarding mortgages helps

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