Average Mortgage Deposit up £11k in Parts

The stamp duty holiday may have worked wonders in reviving homebuyer demand but research from national estate agent, Keller Williams UK, has highlighted the downside to buoyant market conditions, as the cost of the average mortgage deposit has climbed by £11,000 in some areas of the UK market.

Keller Williams UK looked at the cost of buying a home based on the average mortgage deposit at 15 per cent of property value and what this looks like in the current market when compared to June of last year when the stamp duty holiday first launched.

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 prior to the launch of the stamp duty holiday – a 9 per cent jump.

The South West is the region to have seen the largest monetary jump in the average cost of a deposit, up £4,196 since the start of the stamp duty holiday. The South East has also seen an increase of more than £4,000, closely followed by the East of England (£3,498) and London (£3,180).

At local authority level, Hammersmith and Fulham has seen the largest jump with the average 15 per cent deposit climbing 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 climbed by more than £10,000 as a result of the stamp duty holiday, with homebuyers in Rutland (£9,641) and Stratford-on-Avon (£9,236) also facing a considerably tougher task.

Of course, property affordability isn’t just related to the monetary jump in the cost of a mortgage deposit and while some areas of the UK market have seen a smaller increase in the actual sum, they rank with the largest jumps in terms of the percentage increase in the cost required.

In this respect, the North East has seen the biggest increase in the cost of a mortgage, climbing 13 per cent as a result of the stamp duty holiday. Yorkshire and the Humber has seen a 12 per cent jump, while the North West, South West and Wales have seen an 11 per cent increase. Both regions of the Midlands have also seen a double-digit increase in the cost of a 15 per cent mortgage deposit (10 per cent).

Again, this increase is greater at local authority level, with Carmarthenshire seeing a 25 per cent increase in the cost of a mortgage deposit. Manchester, Oadby and Wigston, East Renfrewshire and Rutland have also seen some of the largest increases at 22 per cent.

Ben Taylor, CEO of Keller Williams UK, said: “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.

Much like a night out when you have work the next day, it certainly seemed like a good idea at the time, but current homebuyers will be wondering if it was really worth it given that they now face a considerably larger financial hurdle to homeownership.

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.

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.”

Table shows the current average house price and the cost of a 15 per cent mortgage deposit versus the average house price in June 2020 when the stamp duty holiday launched

Table shows the current average house price and the cost of a 15 per cent mortgage deposit versus the average house price in June 2020 when the stamp duty holiday launched
LocationAveHP June 2020Average deposit June 2020 (15 per cent)AveHP March 2021Average deposit March 2021 (15 per cent)Change in deposit £Change in deposit  per cent
North East£129,432£19,415£145,893£21,884£2,46913 per cent
Yorkshire and The Humber£168,083£25,213£188,575£28,286£3,07412 per cent
North West£168,932£25,340£187,924£28,189£2,84911 per cent
South West£259,679£38,952£287,650£43,147£4,19611 per cent
Wales£167,653£25,148£185,431£27,815£2,66711 per cent
East Midlands£199,061£29,859£219,950£32,993£3,13310 per cent
West Midlands Region£201,785£30,268£220,982£33,147£2,88010 per cent
South East£321,884£48,283£348,615£52,292£4,0108 per cent
East of England£291,736£43,760£315,059£47,259£3,4988 per cent
Scotland£154,871£23,231£166,566£24,985£1,7548 per cent
Northern Ireland£140,841£21,126£149,178£22,377£1,2516 per cent
London£479,107£71,866£500,310£75,047£3,1804 per cent
England£250,865£37,630£274,615£41,192£3,5639 per cent
United Kingdom£234,747£35,212£256,405£38,461£3,2499 per cent
Data sourced from the Land Registry UK House Price Index – June 2020 to March 2021 (latest available data)
Mortgage deposit cost based on the average mortgage deposit of 15 per cent applied to the average house price at both points in time (Source: Trussle)
Table shows the areas of the UK to have seen the largest £ increase in the cost of a mortgage deposit as a result of the stamp duty holiday
LocationAveHP June 2020Average deposit June 2020 (15 per cent)AveHP March 2021Average deposit March 2021 (15 per cent)Change in deposit £Change in deposit  per cent
Hammersmith and Fulham£728,128£109,219£804,517£120,677£11,45810 per cent
Elmbridge£587,142£88,071£661,964£99,295£11,22313 per cent
Haringey£540,014£81,002£607,029£91,054£10,05212 per cent
Rutland£297,486£44,623£361,762£54,264£9,64122 per cent
Stratford-on-Avon£292,268£43,840£353,840£53,076£9,23621 per cent
Data sourced from the Land Registry UK House Price Index – June 2020 to March 2021 (latest available data)
Mortgage deposit cost based on the average mortgage deposit of 15 per cent applied to the average house price at both points in time (Source: Trussle)
Table shows the areas of the UK to have seen the largest  per cent increase in the cost of a mortgage deposit as a result of the stamp duty holiday
LocationAveHP June 2020Average deposit June 2020 (15 per cent)AveHP March 2021Average deposit March 2021 (15 per cent)Change in deposit £Change in deposit  per cent
Carmarthenshire£146,488£21,973£183,129£27,469£5,49625 per cent
Manchester£172,625£25,894£211,107£31,666£5,77222 per cent
Oadby and Wigston£225,760£33,864£275,165£41,275£7,41122 per cent
East Renfrewshire£209,085£31,363£254,649£38,197£6,83522 per cent
Rutland£297,486£44,623£361,762£54,264£9,64122 per cent
Data sourced from the Land Registry UK House Price Index – June 2020 to March 2021 (latest available data)
Mortgage deposit cost based on the average mortgage deposit of 15 per cent applied to the average house price at both points in time (Source: Trussle)

Written by: Houseladder