The average amount people said they had for a deposit in January 2018 was £27,768.This rise suggests that those looking for a mortgage are having to save an ever-increasing amount to secure their first home.
First-time buyers looking at mortgages in January said they’ve saved an average of £30,989 towards a deposit on their first home, an increase of 12% over the course of 2018,Experian has found.
The average amount people said they had for a deposit in January 2018 was £27,768.This rise suggests that those looking for a mortgage are having to save an ever-increasing amount to secure their first home.
Amir Goshtai, managing director of Experian Marketplace and Affinity, said: “It’s understandable that gathering enough money for a deposit can seem overwhelming for first-time buyers when you see how much they have to save, while many are reliant on some sort of support from their family to help boost their coffers.
“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.”
Previous research from Experian found more than a fifth (22%) of homebuyers said that securing a deposit was the biggest obstacle they faced when trying to buy their own home, with more than a quarter (27%) of them relying on financial help from their family to gather enough money.
On average, people received £7,637 from their families to go towards their deposit.
Only 25% of those searching for mortgages had an Experian credit score which falls into the ‘Excellent’ score band.This means the majority of potential homeowners are putting themselves at risk of being rejected for the very best deals when they come to apply.
Some 13% and 17% of people searching for a mortgage are in the ‘Very Poor’ and ‘Poor’ score bands respectively, so are unlikely to be accepted at all for a mortgage.
When it comes to the type of mortgage people are looking for, interest in fixed-term deals remained high in April, with three quarters (75%) looking at fixed-rate deals, compared to 72% in March and 81% in February.
In comparison, just 14% were looking at tracker deals, suggesting consumers are reluctant view a tracker deal as a realistic option for their home loan because of wider uncertainty about the economy.
