Bank of Glum and Dad

Parents feel squeeze as first-time buyer deposits rocket up to 25% to almost £60k

More pressure is piling on the Bank of Mum and Dad with the average deposit for a first-time buyer leaping to nearly £60,000 last year.

The typical cash amount needed to get on the property ladder across the UK ballooned by up to 25 per cent, according to research by Halifax.

It means buyers put down on average £57,278 for their first property last year – a £10,829 increase on the average £46,449 in 2019.

First-time buyers in London were hit by one of the biggest jumps in deposits which rose to £130,357 – £20,000 more than in 2019.

other areas saw huge increases, such as Wales where average deposits rose by 25 per cent to £32,663.

Soaring house prices – fuelled by the stamp duty holiday and pentup demand after the market was put on hold in the first lockdown – reached a record high in November. The average house price in London went above £500,000 for the first time while the UK average increased by nearly 8 per cent to £267,000, according to oNS data.

The rising prices will no doubt see the pressure pile on the Bank of Mum and Dad – with previous research showing more than half of first-time buyers under 35 needed financial support from their parents. Despite many low- deposit mortgages being pulled from the market due to the pandemic, firsttime buyers – aged 31 on average – still made up half of home purchase loans last year, Halifax estimates.

The bank, which used UK Finance figures, said there were 304,657 first-time buyers last year, the lowest since 2015. russell Galley, managing director at Halifax, said: ‘Whilst these figures confirm the almost inevitable fall in the overall number of first-time buyers in 2020... they also underline just how strong the bounce back was in the second half of the year.’

Northern Ireland, Wales and Scotland saw the biggest decreases in first-time buyers last year, while London experienced the smallest fall. Burnley remained the most affordable area for local first-time buyers – calculated by comparing average earnings to average house prices.

other affordable areas were in Scotland, as well as Ards and North Down in Northern Ireland and Doncaster. The most expensive were in London – with Islington and Brent the least affordable.