First time buyers ‘hit the hardest’ by economic downturn

The average deposit needed to buy a new home has risen to 23 per cent of the property’s value leaving many first time buyers unable to save up enough to get onto the property ladder.  A recent survey has also found that Brits now don’t expect to be able to buy their first home until they are 38 years old. A survey by a leading price comparison website and published in the Daily Telegraph found that the average deposit on a new home is now 23 per cent, equivalent to just over £37,000 on the average UK house price of £161,000.

Clare Francis from the website said: “The housing market has been hugely affected by the credit crunch and economic downturn, and first time buyers have been hit the hardest.

“House prices may have fallen in many areas but they are still high.  This coupled with the need for such a high cash deposit is pushing many people out of the market.

“For anyone wanting to get on the ladder, who is renting or living with parents, it’s important to think about how they can make cutbacks to help them build up a deposit more quickly.”

The survey reinforces recent comments from the Council of Mortgage Lenders who described the deposits now required to buy property as the ‘biggest challenge’ facing first time buyers in the UK.  The Daily Telegraph also reports that 80 per cent of first time buyers under the age of 30 are only able to buy because their parents help them out with their deposit.

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