Average Deposit For First-Time Buyers Jumps By £10,000 To Record High Of £57,000
Halifax bank's index found that the average amount put down as a deposit for a house in 2020 nationwide was £57,278 - a sharp rise of 23 per cent from £46,449 the year before (that's a staggering £10,829 more).
It comes as to Office for National Statistics (ONS) figures recently showed that UK house prices surged to a high of £250,000 back in November, while London properties hit peaks of £500,000 - a new high.
These numbers are likely fuelled by high demand in the second half of the year, following the break in the market triggered by the pandemic. Plus, the temporary stamp duty holiday also undoubtedly pushed more people to buy.
In London, it is now £20,000 more expensive to buy a property, on average, than it was in 2019 - according to a property index by Halifax.
First-time buyers in the Capital were dishing out up to £20,211 (18 per cent) more than the year before, too, with average prices rising from £110,145 to £130,357.
Another region which saw a big increase was Wales, with the average first-time buyer deposit growing by 25 per cent (£6,634), climbing from £26,029 to £32,663.
Halifax's findings - which used UK Finance figures - showed that despite these astronomical prices, first-time buyers still accounted for half of all home purchase loans, down only slightly from 51 per cent back in 2019.
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This comes even though many low-deposit mortgages were retracted this year because of coronavirus.
The bank said they had calculated there had been 304,657 first time buyers last year - still an impressive number, given the circumstances, but lowest there has been since 2015, and down around 46,000 from the year before.
The biggest drop in first time buyers came from Wales, Northern Ireland and Scotland while London was least affected.
Russell Galley, managing director, Halifax, said: "Whilst these figures confirm the almost inevitable fall in the overall number of first-time buyers in 2020 - with the entire housing market effectively shuttered during the first national lockdown - they also underline just how strong the bounce back was in the second half of the year.
"Despite the obvious challenges presented by soaring house prices, not least the need to raise an even bigger deposit, first-time buyers still accounted for half of all home purchases, a reassuring statistic given their overall importance to the market.
"However, with the economic impact of the pandemic likely to be felt most keenly by the young and those in lower-paid jobs, the need to prioritise improved housing availability and affordability for all those looking to make that first step on to the property ladder becomes ever greater."
Featured Image Credit: PA
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