Average house purchase deposit hits over £80,000
27/01/2015
The Mortgage Advice Bureau (MAB) has released figures showing that the average house purchase deposit rose to over £80,000 in December.
The average purchase deposit is now at its highest figure ever recorded by MAB's National Mortgage Index, rising 15% over the course of 2015 to reach £81,721 in December. The average purchase price for a property also rose to £252,990, which is a 9.3% increase from December 2014 when the average house price was £231,487.
The increase in deposits is linked to rising house prices, but has also been influenced by a change in mortgage applicants’ behaviour. The average borrower’s loan-to-value (LTV) fell to 68.2% in December, showing that people are opting to pay more of a deposit to get a better deal on their mortgage repayments.
Industry experts have now called for a boost to the construction of new homes so the rising house prices don’t lock first time buyers out of the housing market.
Brian Murphy, head of lending at Mortgage Advice Bureau, commented:
“An inevitable repercussion of rising house prices is that higher deposits are required. Those who cannot afford to put up more may find their choice of properties limited. However, those who were able to make a house purchase in December opted to pay a larger amount upfront by taking out a loan with a lower LTV. There are significant benefits to borrowing a smaller proportion of the purchase price, as rates and monthly repayments will be lower.
“Demand in the housing market is yet to come off the boil, despite the current dearth in property supply. As a result house prices are likely to continue rising this year, bringing about affordability concerns which will particularly affect first-time buyers.”
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