The amount first-time buyers are saving for a deposit has risen by 12% over the past year to reach an average of £30,989.
In January 2018, the average deposit saved was £3,221 less than this at £27,768, according to research by credit reference agency Experian, showing that buyers are having to put down ever increasing sums if they want to get onto the property ladder.
More than a fifth (22%) of homebuyers said that building up a deposit was the biggest obstacle they faced when trying to buy their own home.
Over a quarter (27%) of first-time buyers said they’d had to rely on financial help from their family to help them reach their goal, receiving an average of £7,637 towards a deposit.
Fixed rate mortgages most popular
Three-quarters (75%) of people searching for a mortgage in April were looking at fixed rate deals, the research found, compared to 72% in March and 81% in February. Fixed rate deals can provide valuable peace of mind that if interest rates go up, your mortgage payments won’t change.
In comparison, only 14% said they were looking at tracker deals, which as the name suggests, track the Bank of England base rate plus a set percentage. This suggests that buyers may be nervous about potential rate rises in future and the impact this could have on their monthly payments.
Amir Goshtai, managing director of Experian Marketplace, said: “When people can buy, most are looking at the security of a fixed-rate deal, giving them the assurance of the same monthly payments over the length of the mortgage.
“However, searches for fixed-term mortgages did reduce slightly, which may have been the result of consumers anticipating a resolution to Brexit discussions and greater certainty in the economy.”
Working out how much you need to save
You’ll need to save a minimum of 5% of the property value as a deposit, but the more you can save the better, as having a larger deposit will give you access to a wider range of competitive mortgage deals.
If you’re not sure how much you need to put away each month, or how long it’ll take you to save up your deposit, our savings calculator can crunch all the numbers for you. All you need to do is fill in the amount you can afford to put away each month and it’ll tell you how long it will take you to reach your goal. Alternatively, put in your target deposit and it’ll show you how much you need to save each month to get there.
Find out more about saving for a deposit in our guide to deposits.
First-time buyers save more than £30,000 for deposit