Deposits paid by first-time buyers in West Yorkshire are set to soar to “frightening” levels, according to a leading lender.
L&C Mortgages has forecast that the average first-time buyer deposit could rise by nearly 60% over the next 10 years.
The current average deposit for first-time buyers UK-wide sits at a huge £51,821 – but could go up to as much as £65,930 by 2022.
In 10 years’ time, first-time buyers may need to put down 28% of a property’s value, which could amount to a deposit of £81,468, it is claimed.
The average deposit required by a first-time buyer in West Yorkshire 20 years ago was £4,037 ,representing 9% of the property’s value. By 2007, that had risen to £16,863 or 14% of the total price. Today it stands at £29,589 or 20% of the total value.
The report predicts that by 2022 the average deposit needed will be £63,633 or 21% of the total value and that in 20 years’ time that will be £44,252 or 22% of the property’s value.
David Hollingworth, of L&C, said: “Pulling together a deposit continues to represent one of the single biggest challenges and these forecasts will make frightening reading for aspiring first-time buyers.
“As a result, the Bank of Mum and Dad will no doubt continue to play an important role for those attempting to get on the ladder. Parental and family assistance will often help to build a deposit but can also see them providing a guarantee or additional collateral, to secure the mortgage needed.
“Although improvements to supply of the right type of housing will be required, it is clear that from a practical point of view first-time buyers will need to try to make regular savings as early as possible.”