The amount first-time buyers typically need for a house deposit revealed
First-time buyers in London face a tough challenge, new analysis finds; People have to save around three times more deposits than people in Scotland or northern England.
Nationwide Building Society research shows it can take a potential homeowner nine years to secure a 10 per cent cash deposit in the capital; that’s a full five years longer than those trying to get on the property ladder in some northern England areas.
The typical 10 per cent deposit for a first home in the North East is around £13,100.
Scottish buyers face a similar hurdle of around £13,900, while buyers in Yorkshire and the Humber will need to save around £15,400.
However, a first-time buyer in London will typically need to raise a significant £44,800 for the same 10 per cent deposit; This strikingly demonstrates the significant regional disparity in property accessibility across the UK.
Andrew Harvey, senior economist at Nationwide, said: “The 10 per cent deposit on a typical first-time property purchase in the UK is around £23,000.
“Even if 10 per cent of the average monthly net salary (about £320) were saved, it would take around six years for a potential buyer to save this.
“However, the required deposit level also varies significantly by location, reflecting differences in average house prices.
“For example, a 10 per cent deposit in London is three times more than its equivalent in the North. It will also take a Londoner nine years to save their deposit, while it would take someone buying in the North around four years, given that they save 10 per cent of their average net salary.”
Some first-time buyers may find they can boost their savings, for example, by using Lifetime Isas that come with the bonus.
Financial help from loved ones is also often vital for first-time buyers trying to raise their deposit amount.
Mr Harvey said he estimated that in 2024-25, more than a third of first-time buyers had received some help raising a deposit from family or friends, through a gift or loan or inheritance.
He added: “Looking ahead, we expect housing market activity to strengthen slightly as income growth outpaces house price growth and affordability continues to gradually improve through a moderate decline in interest rates.”
Mr Harvey also said mortgage affordability was particularly challenging in some sectors of employment, such as those working in sales and customer service roles and those in occupations such as construction and manufacturing workers, cleaners and couriers.
Mr Harvey said: “In these groups, typical mortgage payments represent around 50 per cent of the average take-home pay.”
According to Nationwide Building Society’s calculations, the cash equivalent of a 10 per cent deposit for an average or typical first-time purchase property is:
North East, £13,100
Scotland, £13,900
Yorkshire and Humber, £15,400
Wales, £17,300
North West, £17,400
East Midlands, £19,400
Northern Ireland, £19,400
West Midlands, £20,400
East Anglia, £21,200
South West, £24,700
Outer South East (includes Ashford, Basingstoke and Deane, Bedford, Braintree, Brighton and Hove, Canterbury, Colchester, Dover, Hastings, Lewes, Fareham, Isle of Wight, Maldon, Milton Keynes, New Forest, Oxford, Portsmouth, Southampton, Swale, Tendring, Thanet, Uttlesford, Winchester, Worthing), £26,300
Outer Metropolitan (includes St Albans, Stevenage, Watford, Luton, Maidstone, Reading, Rochford, Rushmoor, Sevenoaks, Slough, Southend-on-Sea, Elmbridge, Epsom and Ewell, Guildford, Mole Valley, Reigate & Banstead, Runnymede, Spelthorne, Waverley, Woking, Tunbridge Wells, Windsor and Maidenhead, Wokingham), £32,800
London, £44,800
