Deposits higher than ever as borrowers fork out over £72,000

The average house purchase deposit is £72,302 – thought to be a record.

The figure was reached last month and is the highest since Mortgage Advice Bureau began recording the data in March 2009.

It surpasses the previous peak of £71,474 recorded last June.

Measured over the year, in May 2014, borrowers took out an average loan of £161,887 and put down a deposit of £69,238. It means that deposits are now £3,064 higher.

According to MAB data, compiled from over 600 brokers and 900 estate agents, average loans also reached new heights in May. Average loan sizes have now increased for four consecutive months.

The typical home buyer in May applied for a loan of £167,842, up from the previous high of £166,141 just one month earlier, and up from £161,887 in May last year.

The new figures paint a stark picture of the difficulties faced by first-time buyers, currently paying record rents but having to dig ever deeper into their pockets for deposits.

MAB said that the issue is “concerning” and said that the forthcoming Help to Buy ISA – which will effectively give individual first-time buyers a tax break of up to £3,000 on £12,000 of savings for a deposit – would be of little help on its own.

Head of lending Brian Murphy said: “Measures introduced to the mortgage market since the recession mean there are multiple checks and balances to ensure that people do not borrow beyond their means. Thanks to recovering houses prices, many existing home owners have extra equity in their properties and can balance their borrowing commitments with a significant stake of their own.

“Putting up a 30% deposit helps to unlock some of the best rates on the market and helps keep mortgage payments even more affordable. The rise of deposits is less encouraging for first time buyers, but there is at least some hope that more low cost properties will become available as second- and third-steppers make their move up the ladder.

“The range of affordable schemes to support first time buyers will soon be boosted by the arrival of the Help to Buy ISA.

“All the same, the savings scheme will not be enough on its own to solve the long term issues that are driving up prices and deposits across the market.”

The MAB data includes buy-to-let mortgages.

 

 

 

 

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One Comment

  1. Andy W

    Does this apply to all mortgages taken or just to residential mortgages? BTL’s will skew that figure a bit.

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