First-time buyers ‘may need to raise thousands more to get on property ladder’
First-time buyers in England face needing to raise around £12,000 more if they now find they need to put down a 15% deposit rather than 10%, according to analysis.
The number of 5% and 10% mortgage deals on the market now stands at just a fraction of the amount before the lockdown.
If a 10% deposit is required, people taking their first-step on the property ladder in England may need to put down around £24,000 typically, according to analysis by Rightmove, based on the average price tag on a typical first-time buyer home.
But if a 15% deposit is needed, then a buyer may need a deposit of around £36,000 – with the £12,000 difference perhaps coming from their own savings or the “bank of mum and dad”.
England’s housing market re-opened for business last week.
But those hoping that now is their chance to get on the property ladder will find that many low-deposit mortgage deals have vanished while the housing market was on pause.
Figures from Moneyfacts.co.uk given to the PA news agency show that, as of Tuesday this week, there were just 30 deals available for those with a 5% deposit – less than a tenth of the number two months ago. Some 387 5% deposit deals were on the market on March 19.
The number of 10% deposit deals available has also nosedived, to 87, from 782 two months ago.
The choice of 15% deals has also dwindled over the past two months. The shrink back has been less severe, falling from 677 15% deposit deals on March 19 to 251 by Tuesday.