An estimated £37,000 required for first time buyers to purchase a home
It is estimated that first time buyers now require on average £37,000 prior to being able to purchase a house. House prices in the UK have seen a slight increase over the last year. However, due to the recent ‘credit crunch’ banks still require substantial deposits to secure the most competitive deals – generally the bigger the deposit the better the deal.
The average age of first time buyers without financial assistance from parents has shot up from 29 to 37 years or age. Inline with this, the number of first time buyers has slumped to a record low. The Council of Mortgage Lenders (CML) has said that the average price of a first home in the UK is now £139,000. Being an average, there are obviously regional variations to be taken into consideration
The £37,000 average is calculated as follows:
- Deposit: £34,708
- Mortgage fee: £902
- Legal fee: £650
- Land registry: £200
- Searches: £200
- Survey: £300
- Money transfer: £30
TOTAL: £36,990
Various mortgage companies state that they do in actual fact still off 90% mortgages, which would obviously massively reduced the deposit required for a first time buyer. However, due to the risks involved, the interest rated offered would be considerably higher. This in turn makes the monthly payments considerably higher too, making them unaffordable to most.
Is their light at the end of the tunnel? Some economists have predicted a price drop in the housing marked over the next 12 months, which would help first time buyers.
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