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Average First Time Buyer mortgage deposit now just £10,536

In last week’s Budget, the government announced a guarantee to lenders offering mortgages to homebuyers with just a 5% deposit requirement up to the sum of £600,000. 

Research by lettings and estate agent, Barrows and Forrester, has looked at what this means for first-time buyers (FTBs) across Great Britain, based on the cost of a 5% deposit on the average first-time buyer house price in each region. 

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Great Britain

The average first-time buyer house price in Great Britain currently sits at £210,727 meaning that British FTBs would need to save just £10,536 for a 5% deposit, compared to the usual 15% average of £31,609. 

Regional Difference

The North East remains home to the lowest average FTB property cost at just £120,953, meaning a 5% deposit will now require a saving pot of just £6,048 compared to £18,143 previously.

In contrast, London is home to the highest FTB house price at £431,160 and, as a result, the largest cost of a 5% mortgage deposit (£21,558). That said, the positive news for FTBs in the capital is the availability of a 5% deposit will see them benefit from the biggest reduction in mortgage deposit costs, down a huge £43,116 from £64,674.

Most Affordable 

The most affordable area across the entire UK is Inverclyde in Scotland. With £87,827 paid by FTBs in the area, they will now be able to obtain a mortgage for a deposit as little as £4,391. 

The North

Burnley (£4,406) in the North West and County Durham (£4,998) in the North East are both home to the lowest cost for a 5% mortgage in their respective regions.

Wales and the Midlands

Blaenau Gwent is home to the lowest initial financial barrier in Wales, with a 5% mortgage deposit costing a mere £5,156. In Yorkshire and The Humber, the City of Kingston upon Hull (£5,320) is the most affordable, while Stoke-on-Trent (£5,620) in West Midlands and Mansfield (£6,530) in the East Midlands also rank as the most affordable within their regions. 

The South

It’s no surprise that the costs start to increase slightly the closer we get to London. Although still relatively affordable, Great Yarmouth in the East of England is home to an average FTB house price of £154,614, requiring a 5% mortgage deposit of £7,731. 

In the South West, the City of Plymouth (£8,161) is home to the lowest 5% mortgage deposit, while in the South East it’s Southampton (£9,610).

Finally, London’s Barking and Dagenham ranks as the city’s most affordable area where the cost of a 5% FTB mortgage is concerned. That said, FTBs in the borough will still need to stump up £15,035.

Managing Director of Barrows and Forrester, James Forrester, commented:

“We’ve seen numerous schemes targeted at helping first-time buyers get on the ladder in recent years and rightly so. The cost of homeownership has spiralled drastically across Britain in the last 30 years and so it’s vital we do all we can to address this issue of affordability and remain a nation of homeowners

The great news is, that with a 5% mortgage deposit, the initial financial barrier of securing a mortgage will now be far lower than it previously was.

However, the latest scheme could have potentially detrimental effects, resulting in house prices climbing further out of reach for homebuyers. 

Allowing every man, woman and their dog to buy with a 5% deposit is almost certainly going to push up demand. Unfortunately, the government has yet again opted to turn their back where house building is concerned. 

The dangerous consequence of fuelling demand while neglecting stock delivery is always an inflated rate of house price growth and so in this respect, it could be a very counterproductive initiative indeed.”

Read Birmingham Pensioner Homeowners Are Now Worth £18,752,224,100

Read Why Are Half of Jewellery Quarter Homeowners Moving Within 8 Years & 12 Weeks?

Table shows the cost of a 5% deposit for a mortgage on the current first-time buyer house price in each region
LocationAverage FTB house price – Dec 20205% deposit15% depositSaving
North East£120,953£6,048£18,143£12,095
Scotland£131,034£6,552£19,655£13,103
North West£154,175£7,709£23,126£15,418
Yorkshire and The Humber£156,387£7,819£23,458£15,639
Wales£159,106£7,955£23,866£15,911
West Midlands Region£180,558£9,028£27,084£18,056
East Midlands£180,670£9,034£27,101£18,067
South West£231,541£11,577£34,731£23,154
East of England£257,493£12,875£38,624£25,749
South East£271,016£13,551£40,652£27,102
London£431,160£21,558£64,674£43,116
England£224,560£11,228£33,684£22,456
Great Britain£210,727£10,536£31,609£21,073
SourcesGov.uk – UK House Price IndexGov.uk – Budget 2021
Table shows the top 3 most affordable areas in each region of Britain based on the cost of a 5% FTB mortgage deposit
RegionLocationAverage FTB house price – Dec 20205% deposit15% depositSaving
East MidlandsMansfield£130,593£6,530£19,589£13,059
East MidlandsBolsover£133,366£6,668£20,005£13,337
East MidlandsLincoln£142,035£7,102£21,305£14,203
East of EnglandGreat Yarmouth£154,614£7,731£23,192£15,461
East of EnglandCity of Peterborough£164,740£8,237£24,711£16,474
East of EnglandFenland£169,555£8,478£25,433£16,955
LondonBarking and Dagenham£300,706£15,035£45,106£30,071
LondonBexley£315,347£15,767£47,302£31,535
LondonCroydon£321,614£16,081£48,242£32,161
North EastHartlepool£91,691£4,585£13,754£9,169
North EastCounty Durham£99,964£4,998£14,995£9,996
North EastMiddlesbrough£102,224£5,111£15,334£10,222
North WestBurnley£88,125£4,406£13,219£8,813
North WestHyndburn£95,136£4,757£14,270£9,514
North WestPendle£96,308£4,815£14,446£9,631
ScotlandInverclyde£87,827£4,391£13,174£8,783
ScotlandEast Ayrshire£89,814£4,491£13,472£8,981
ScotlandNorth Ayrshire£93,571£4,679£14,036£9,357
South EastSouthampton£192,209£9,610£28,831£19,221
South EastHastings£197,204£9,860£29,581£19,720
South EastIsle of Wight£197,544£9,877£29,632£19,754
South WestCity of Plymouth£163,210£8,161£24,482£16,321
South WestGloucester£180,207£9,010£27,031£18,021
South WestTorbay£182,450£9,122£27,367£18,245
WalesBlaenau Gwent£103,118£5,156£15,468£10,312
WalesMerthyr Tydfil£105,269£5,263£15,790£10,527
WalesRhondda Cynon Taf£116,596£5,830£17,489£11,660
West Midlands RegionStoke-on-Trent£112,401£5,620£16,860£11,240
West Midlands RegionWolverhampton£144,406£7,220£21,661£14,441
West Midlands RegionNewcastle-under-Lyme£147,824£7,391£22,174£14,782
Yorkshire and The HumberCity of Kingston upon Hull£106,394£5,320£15,959£10,639
Yorkshire and The HumberNorth East Lincolnshire£120,282£6,014£18,042£12,028
Yorkshire and The HumberBarnsley£125,231£6,262£18,785£12,523
SourcesGov.uk – UK House Price IndexGov.uk – Budget 2021

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