Average deposit up £5,000 over last year
The average property deposit across England and Wales has increased by around £5,000 year-on-year despite the amount needed falling as a percentage of the price of a home, according to the figures from conveyancing service provider My Home Move.
Indeed, deposit percentages decreased year-on-year by an average of 1% across all regions, with the exception of Greater London where a rise of 1% or around £18,000 was recorded.
The research, which compared the deposit sizes for the first six months of 2015 and 2016 against average property prices discovered that home buyers across the country were securing their new homes with an average deposit of £55,000, up from £50,000 in the first half of 2015.
Doug Crawford, the firm’s chief executive officer, said: “The decrease in deposit percentages indicates that the measures introduced by the government to ensure easier lending across the mortgage market, have had a positive impact, especially for those outside of the capital.
“However, while this may sound like great news for home buyers, the reality is somewhat different. The rise in property prices means that in real terms this decrease actually translates into increase in the majority of regions.”
For example, for those looking to buy in Wales the increase, on average, is only a few hundred pounds, but for those in London or the South East this translates into thousands of pounds.
Crawford added: “For many, their deposit will come from the equity in the property they are selling. However, there are still a large proportion of home buyers who will need to save thousands of pounds more, to make the move onto and up the property ladder.”
The two exceptions revealed in the research included Greater London and the North East. For home buyers across the capital, a rise in property prices of 13.6% year on year, resulted in deposit sizes increasing by 1% of the purchase price, the equivalent of £18,000.
In the North East, where property prices witnessed only a minimal increase, the overall size and value of an average deposit decreased by 1.78% and £1,418 respectively.