Saturday, May 28, 2022

Average mortgage deposits jump as housing market booms

house price

At £234,474, the current UK average house price requires homebuyers to stump up £38,461 for a 15 per cent mortgage deposit

The cost of the average mortgage deposit has jumped £11,000 in some parts of the UK as the stamp duty holiday fuelled the housing market.

This is according to Keller Williams UK agency which looked at the cost of buying a home based on the average mortgage deposit at 15 per cent of a property’s agreed price.

At £234,474, the current UK average house price requires homebuyers to stump up £38,461 for a 15 per cent mortgage deposit.

This is £3,249 more than the average 15 per cent deposit of £25,212 – a nine per cent hike – prior to the launch of the stamp duty holiday.

The average cost of a deposit climbed the most in the South West – rising £4,196 since the start of the stamp duty holiday.

The South East has also seen a rise of over £4,000, closely followed by the East of England (£3,498) and London (£3,180).

The stamp duty holiday is now effectively over for all but those in the final stages of a transaction due to the long market delays that have accumulated at the back end of the process, explains Ben Taylor, chief executive of Keller Williams UK.

This reduction in affordability has been felt right across the UK with southern regions seeing the largest monetary jump, while those in the north are facing the highest increase versus what they were paying previously, he says.

While the end of the stamp duty holiday will no doubt bring a natural correction to an otherwise overheating market, it’s unlikely to cause prices to crash and so the cost of buying looks set to remain a tough ask for those yet to climb the ladder, Taylor says.

Hammersmith and Fulham has seen the largest jump at local authority level, with the average 15 per cent deposit jumping by £11,458 when compared to June of last year.

The initial cost of buying in Elmbridge (£11,223) and Haringey (£10,052) has also jumped by more than £10,000 due to the stamp duty holiday, with homebuyers in Rutland (£9,641) and Stratford-on-Avon (£9,236) also facing steeper charges.


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