Regularly putting aside a chunk of your disposable income to get onto the property ladder is the epitome of short-term pain for long-term gain, but how long will you need to keep saving to get your foot on that all-important first rung?
In today’s post, we’re going to take a look at the average first-time buyer deposit in London and explore the level of competition you’ll face in the property market once you’ve saved up. We’ll also have a look at how long it will take to save your first property deposit, too.
Let’s crack on with the answer to the title’s question, shall we?
What’s the average first-time buyer deposit in London?
According to data from Halifax, the average deposit put down by first-time buyers in the capital currently stands at £115,759. Although this figure seems eye-wateringly high (and let’s face it, it is), this latest first-time buyer deposit data actually shows a year-on-year drop of 11% (down from £130,281 in 2020).
Across the same timeframe, average property prices for first homes in Greater London fell by 3% (down from £488,771 to £475,819). As a result, the deposit as a percentage of the purchase price in 2021 was 24%, which again was 3% lower than the year before (27% in 2020).
How does this compare with average first-time buyer deposits across the UK?
As one would expect, both house prices and the deposits required to secure a property purchase are significantly higher in Greater London than they are elsewhere in the country. The next highest region is the South East, where average first-time buyer deposits currently stand at £60,953 - almost half that of the capital.
At the other end of the spectrum comes the North East, where the average deposit for first-time buyers is £26,769. This is 77% lower than what you’d need to raise if you’re looking to buy your first home in London.
The UK average first-time buyer deposit is now £53,935, which shows just how much the capital skews the figures for the country as a whole. In fact, eight out of the 12 UK regions surveyed have average deposits for first-time buyers of £40,000 or less.
How many first-time buyers are there in Greater London?
If you’ve already saved up a deposit for your first home, or are close to doing so, you may be wondering how much competition you’ll face when you enter the property market.
In 2021, Halifax estimated that there were 56,857 first-time buyers in Greater London, a jump of 49% from the previous year (up from 38,140). Even more astonishing is the fact that first-time buyers in the capital have increased by 82% over the last decade (up from 31,290 in 2011), yet this is the smallest increase in the country for the same 10-year period.
How old are first-time buyers in the UK?
Despite the drop in deposit amounts required, the average age of first-time buyers is increasing. The current data shows that the average age of first-time buyers across the UK is now 32, with London being slightly higher at 33. This has been attributed to a number of factors, not least of which is the continuing house price growth across most of the country.
Check out our other post, What's the Average Age of a First Time Buyer in the UK?, for a deeper dive into the topic.
How long does it take first-time buyers to save their deposit?
According to data compiled by Censuswide for Barclays earlier this year, the average age that first-time buyers begin to save for their property deposit is 24.
Somewhat unsurprisingly, 73% wished they’d begun saving sooner. However, with more and more youngsters entering higher education and taking time out to travel, beginning to build a property war chest at a younger age than 24 is as unreasonable as it is unlikely.
What percentage of first-time buyers rely on family support?
As we discovered in our piece on the Bank of Mum and Dad (BoMaD), an incredible 56% of all first-time buyers under the age of 35 had financial assistance from their parents to buy their first home.
Over the last decade, the BoMaD has helped somewhere in the region of 1.4 million buyers get their foot on the property ladder.
That’s it for another week, we hope you found this post informative. If you want property related posts to hit your inbox every week, be sure to sign up to our newsletter. We publish every week and cover all aspects of the property market.
If you are looking to buy in or around the capital, make Petty’s your first port of call. We have been helping people make their move for well over a century, and we’d love to welcome you into the family. Give our friendly team a call today and find out what has made us stand out from the crowd since 1908.
Kinga has been in sales since she was 17 and she already has both Negotiator and Sales Progression qualifications under her belt. She is bilingual, has a weakness for chocolate, and cites Robins Pie & Mash and The Cuckfield as her favourite Wanstead haunts.
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