The average deposit required to purchase a property in England and Wales is £26,500, according to the finding of the Castle Trust. Looking at the 30 biggest cities and regions, the research found the average house price and what would be required for a 20% deposit. While borrowers can get a mortgage with a deposit of as little as 5% of the purchase price, the Council of Mortgage Lenders (CML) reported that the majority of mortgages are secured with a 20% deposit.
However, the range of deposits required varies drastically from £14,471 in Blackburn, to £72,760 in London, nearly twice as much as the second most expensive city of Reading, where a deposit of £39,789 is needed. The size of the deposit is closely related to the average house price in the area. The findings reflect a significantly difference in the average house price between the North and South, with Northern cities being noticeably cheaper.
The research shows how the further geographically south one travels; the more expensive the average house price is likely to be. However, there are some exceptions such as Leeds, which was placed thirteenth most expensive, the only city in the wealthiest fifteen outside the South or Midlands.
Sean Oldfield, Chief Executive at Castle Trust, commented that ‘parents and grandparents are being called on more and more to help children with their first deposit.’ However, as the popularity of buy-to-let mortgages increase in London and the South East, young would-be buyers looking to live near expensive areas may find the rental sector a cheaper alternative to coming up with such a large deposit.
