112% increase in UK mortgages

This is a 112% increase (Photo: Getty Images/iStockphoto)

According to property experts, the average first-time buyer will need a down payment of around £75,000 to move up the house ladder.

That sum has doubled in the previous decade, according to Rightmove, with a single person needing £74,402 on deposit to get a mortgage approved.

If you buy a house on your own and can only save £100 a month for a deposit, it will take you 62 years to save enough money.

Although the costs are not the same for everyone, the calculations assume that a single buyer on the median salary can borrow up to 4.5 times their salary to buy a house of £223,117 (the average asking price current in the UK).

This represents a 112% increase from ten years ago. On average incomes at the time, someone buying on their own would have needed £35,053 as a down payment.

Buying a house with a partner, on the other hand, eases some of the financial burden.

The minimum deposit amount for two people buying together has risen from £14,269 to £22,312 based on the same criteria, but at a slower pace.

Indeed, having two salaries allows you to borrow more money. A couple buying a house together should be able to take out a mortgage with a 10% down payment, or £22,312.

Rightmove also commented on rising property prices, saying the average asking price for a first-time buyer is 56% higher than it was a decade ago.

“The next generation of first-time buyers now have to raise more than 50% more down payment than a decade ago, when average incomes have only increased by 35%,” Rightmove’s Tim Bannister told About the results.

“That’s before you consider whether you’ll be able to get a mortgage, because right now if you’re buying on your own you’d need a big deposit of over 30% to be able to borrow enough to buy a typical first-time homeowner.

“If a review of the mortgage market could help with the challenge of needing such a large deposit, it would be very much welcomed by those who are able to demonstrate that they can afford monthly payments, but who are currently excluded from the property.

‘It’s clear to see why there are many tenants keen to move up the ladder, as they are shelling out 40 per cent more each month than a decade ago, while low interest rates mean that installments average mortgages have only increased by 11% compared to this same time.

“Although competition between buyers is now starting to ease, we are still in a market where demand massively exceeds supply in many parts of the UK.

“It has already pushed prices to record highs, so the challenge for first-time buyers to raise a down payment is not going to get any easier.

“The review will take time and therefore any solution will be of no use in the short term.” So, as the cost of living rises, more people are likely to look further afield in cheaper areas to climb the ladder.

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