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.”  

Join our mailing list:

Leave a comment



Our Next Event

Complex Lending Roadshow March 2017

Complex Lending Roadshow March 2017

Bolton - 14/03/2017

Barnsley - 15/03/2017

Solihull - 16/03/2017

Watford - 17/03/2017

Register now

Latest Comments

Matthew Hollywood
Matthew Hollywood 07 Feb 2017

Matthew Hollywood - Director Mishon Mackay Land & New Homes - Brighton The shortage of New Homes is in part effected by the lack of land sales. Land sales are held back because there is a disparity between...

view article
CommercialTrust
CommercialTrust 30 Jan 2017

Hi Graham, Would be interesting to see the above figure calculated against an investment via a Lt Company /SPV structure and if the investor found themselves pushed in to the higher tax bracket. Mortgage...

view article
Tony Gimple
Tony Gimple 16 Jan 2017

HMOs do make great commercial sense, but do the area research first!

view article
OJoyce
OJoyce 30 Dec 2016

We can only hope this will bring the results we all want and strive for.

view article
Reality
Reality 21 Dec 2016

The changes to land tax were a shock to many when it was first announced by the Chancellor in 2015?s Autumn Statement. However, once the changes came into place and the full details were digested, it?s...

view article
akbar ali dayala
akbar ali dayala 20 Dec 2016

I am a landlord and director of an online letting agents at the moment we charge tenants minimal fees and landlord also meaning we can get best deals for tenants all around if the ban comes in it...

view article
milessgabriel
milessgabriel 05 Dec 2016

Useful article

view article
Spencer Fortag
Spencer Fortag 30 Nov 2016

I am glad that someone listened to me!

view article
Tony Gimple
Tony Gimple 27 Nov 2016

It's not just the lack of estate agency advice that's costing landlords money; most are getting seriously bad advice from their accountants resulting in tax bills far higher than they need to be. Likewise,...

view article
Sally Walmsley
Sally Walmsley 18 Nov 2016

The RLA stands by its sell-off statistics. While we welcome the feedback from Mr Jagota and are delighted to hear how well things are going for landlords in the north east, we would like to make it clear...

view article
Sheryl87
Sheryl87 18 Nov 2016

The high employment levels and the vibrant economy has led to ever-increasing demand for rental properties, especially from professionals relocations from other cities. This has led to more experts teaming...

view article
Sheryl87
Sheryl87 18 Nov 2016

Renting out your house can be risky business. It's good to think about residential landlords insurance. Standard cover includes buildings cover and cover for loss of rent following damage to a property...

view article

Related stories

More articles from Hero