The price of deposits for a property increase

Mortgage brokers have found that deposits to buy a property in the UK have increased, following tougher lending rules.

The typical deposit house buyers will need has risen to £71,078, the highest level since October 2013.

In December, buyers put down an average of 30.7% of the house price, an increase from £68,829 recorded in the latest index from the Mortgage Advice Bureau.

During 2014, house deposits rose for most of the year with March seeing 28% of the property value being paid by buyers.

The amount being paid for a deposit rose in April last year, when tougher lending rules came into force.

The rules required tougher lending checks on borrowers, ensuring that repayments could be made even if interest rates increased to 7%.

Tougher lending rules particularly affect first-time buyers or homebuyers who have a small deposit.

Rising house prices have also been a factor when it comes to putting down a deposit, forcing buyers to put down more to secure a home.

However Chancellor George Osborne announced a stamp duty reform, which would help buyers have more money for a property deposit.

Head of lending at MAB, Brian Murphy said: “December’s stamp duty announcement was an early Christmas present for many aspiring buyers. Having extra funds to put towards a deposit can not only help to limit borrowing commitments and give people bargaining power.”

If you’re looking to move home and need financial help, compare mortgages for the latest rates and providers.

Source: This is Money 

Naomi Havergal
Friday 23rd January 2015

Category: Mortgages

Back to top