Average first-time buyer deposit now almost £62,500, Halifax data shows

The number of first-time buyers in the UK dropped by 11 per cent in 2022, according to new data from Halifax, as the average deposit required soared to almost £62,500.

Overall, 362,461 buyers made it onto the housing ladder last year, with the year-on-year decline continuing to a record level seen in 2021.

Average property values ​​for first-time buyers are now around 7.6 times the UK average wage, Halifax said.

In 2022, the average cost of a home for a first-time buyer increased by 13% to £302,010, and average deposits now represent 21% of the purchase price.

This means that, on average, a first-time buyer needs to raise £62,470 for a deposit to buy a house, up 8 per cent from 2021.

In 2021, the ‘race for space’, the demand built up during the pandemic and the stamp duty holiday, led to a record number of buyers getting the keys to their first home.

The number of first-time buyers in 2022 remained above pre-pandemic levels and was the highest number since 2016.

However, the Halifax data revealed that buying a home is becoming less affordable. He said nearly two-thirds (63 percent) of completed mortgages are now in a joint name, with two or more people.

This may be due to deposit and mortgage affordability restrictions, which remain the biggest barrier for first-time buyers who own their own property.

Nationwide data has shown that first-time buyer homes are the least affordable since 2008, with mortgage payments eating up 39 percent of a buyer’s salary.

Yet despite these hurdles, first-time homebuyers now account for more than half (52 percent) of all home loans, the highest in the past decade.

The number of first-time buyers in 2022 surpassed the numbers seen before the pandemic

The most affordable area for first-time buyers in the UK is West Dunbartonshire in Scotland, where buyers need to borrow about 2.7 of the average wage to buy.

The least affordable areas of the country are in London. First-time homebuyers face median home prices of 10 times the median salary if they want to buy in Westminster or Camden.

The need to save a larger deposit means that the average age of a first-time homebuyer is increasing. A decade ago the typical first-time buyer in the UK was 30, but this has now risen to 32.

>> Looking for a home? The first-time buyer’s guide to getting a mortgage and moving up the property ladder

For first time buyers, the average deposit needed to get on the ladder is now over £62,000

Kim Kinnaird, Halifax’s chief mortgage officer, said: “More than 362,000 people jumped on the property ladder in 2022, and first-time homebuyers now account for more than half of all home loans.”

‘Buyers looking to take their first step up the property ladder can welcome the expected drop in house prices this year, provided there is supply. However, the cost of buying a home is still significant, and saving for a down payment can be a challenge for some first-time buyers.

‘The amount of time needed and the cost of collecting a deposit are likely to have an impact on the profile of the average first-time buyer over time. Today, those starting on the housing ladder are 32 years old, on average, two years older than a decade ago, and nearly two-thirds of people now get their first mortgage in a joint name.’