We all know the struggles of being a first-time buyer, with affordable housing being at an all-time low combined with low paying graduate jobs, it seems like we might never get out of the renting cycle or leaving our childhood homes. Often first time buyers need to pull together a mortgage of 10%-15%, which is no small feat, considering the average graduate job outside London is between 20-25 grand a year. Although some banks and lenders are offering 5% mortgages, these come with their own risks including 40-year payment plans and with interest rates at staggering lows.
What does the average first time buyer splash out on a home?
Right let’s look at the stats and see just how hard it is for first time buyers. The average depends on the location, as you would expect London is considerable higher than the rest of the UK. But on average a first-time buyer spends between £210000 and £230000 on their first property. In London and southern England, the average first time purchase in nearer £400,000. So even if one manages to get 20% mortgage they still must fork out a £20,000 deposit.
Over the last ten years, the deposit for a first-time buyer has doubled. A Halifax report uncovered that the average first time buyer report was £32,000 in 2016. These sorts of figures are out of the reach for the average 20 something worker.
Amazingly despite these figures, first times purchase is rising and this sector of the market is up 7%. A few factors have contributed to this
- The stamp duty sub charge on second homes
- The help to buy scheme
- Mortgage tax relief
The reason for the rise has arguably been down to new positive economic factors as well. There has been a strong increase in employment, support from parents and mortgage rates have been at a historic all-time low. However, this does not reflect the lower earning or average households. The school of London