Average first time buyer deposit is 17 per cent

Deposits paid by first time buyers trying to get on the British housing ladder during the last 12 years have averaged 17 per cent of the overall property value - two per cent more than the current average - and taken an average 29 months to save for, according to research from Santander Mortgages.

Almost one in five first time buyers (17 per cent) have paid between 6 - 10 per cent deposit on their first home, with 3.5m (12 per cent) putting down between 11 and 20 per cent to ensure they secure a foot on to the property ladder. Perhaps surprisingly one in 10 paid almost half of the full property price as a deposit with a further 15 per cent buying the property outright.

When buying their first home, over four in 10 (43%) first home owners counted the pennies and used their savings to enable them to take that first step on to the property ladder. A further 8 per cent relied on inheritance or used money gifted from parents (6 per cent). One in 20 (5 per cent) sought additional work while 4 per cent took out a loan.

Phil Cliff, Director of Santander Mortgages, commented:  "Our research has found that despite the availability of 5 per cent deposit mortgages throughout most of the noughties, first time buyers opted to put down an average of 17 per cent deposit to secure their first home - over two per cent more than the average deposit currently paid now. The majority have done so via the ‘traditional' route of savings. As the ‘Home of UK Mortgages', Santander understands the challenges that often face First Time Buyers which is why we offer a number of products dedicated to their needs, including our latest 10 per cent product at a market leading 5.29 per cent rate and £495 upfront fee available exclusively to Santander First Home Saver customers. Offering 5.00 per cent gross p.a./AER variable, this specialist savings account will help First Time Buyers reach their target sooner. While our new exclusive two year mortgage deal offers a great rate and low fee and will surely provide a welcome boost to the First Time Buyer market."

Regional differences

Deposits for first homes in the South West were the highest, at an average of 20.7 per cent compared to London's 18 per cent. Those in the North East averaged 8.9 per cent of the property's value.

First time buyers in London meanwhile were the most independent, with 1.6m (57 per cent) using their own savings to fund the deposit for their first home. This was closely followed by first home owners in Wales (55 per cent). Buyers in Wales (11 per cent) and Northern Ireland (11 per cent) were equally willing to roll their sleeves up and seek additional overtime while just 2 per cent of East of England buyers relied on their parents to gift them the money.

On Friday 20 May, Santander, is launching a market leading new two year fixed Homebuyer product at 90 per cent LTV, at 5.29 per cent with £495 upfront fee. All of Santander's current range of 10 per cent deposit mortgages comes with our Homebuyer Solution. The Homebuyer Solution offers borrowers the added benefits of a free standard mortgage valuation and £250 cash-back on completion.

Customers can visit any local Santander branch to apply for a First Home Saver savings account. Existing First Home Saver account customers can find out more about the exclusive First Home Saver Mortgage offer by visiting santander.co.uk.
 
Throughout May and June 2011, homeowners and non-homeowners alike can take advantage of an up to 20 per cent discount available to all new Santander Home Insurance customers. Further details are available at santander.co.uk.