In 2020, only 73% of first-time buyers were able to afford a deposit greater than £15,000, but in 2021 this number increased to 87%.
Online mortgage broker Trussle has revealed a positive image of the housing market's performance in the face of the pandemic, and in particular that the size of housing deposits has increased dramatically.
Faced with limited spending options due to less commuting and the closure of hospitality and retail, many buyers have been able to use lockdown to review their finances with the hopes of buying a new home.
First-time buyer applications saw a 185% increase in 2020, with applications again increasing by 74% in Tussle's data from March 2021.
In 2020, only 73% were able to afford a deposit greater than £15,000, but in 2021 this number increased to 87%; according to Trussle, this should have offset the fact that many lenders tightened their criteria at the onset of the pandemic.
Spurred on by the prospect of saving up to £15,000 thanks to the stamp duty holiday, next-time buyer applications increased by 93% year-on-year during 2020, and a further 85% in 2021.
Trussle found that in 2019 only 51% of next-time buyers had a deposit over £25,00, but this grew to 67% in 2020 and to 76% in 2021.
New mortgage applications outpaced remortgaging, with rates falling from 72% of all applications received in 2020 to just 45% in 2021.
Trussle previously found that customers save £334 on average per month by remortgaging onto a fixed rate.
Miles Robinson, head of mortgages at Trussle, said: “Despite the coronavirus pandemic bringing huge economic uncertainty, this hasn’t deterred would-be house hunters, and particularly first time buyers.
"The market became virtually inaccessible for first-time buyers and those with smaller deposits, as lenders took a more cautious approach and restricted their criteria.
"However, some first-time buyers have been able to use this time to save more money towards their housing deposit, and this could explain why activity from this group has soared throughout the pandemic.
"While this is all positive news, we should still exercise some caution.
"There’s evidence to suggest prices have been inflated due to the demand created by the stamp duty holiday, which has led to bidding wars and a lower stock of available properties.
"Our data shows that the public have been incredibly responsible with their finances and it would be wise to continue with this approach until we reach a greater sense of certainty.”
