To obtain a mortgage, first-time homebuyers in the UK need to save a deposit amounting to about ** percent of the property purchase price. The higher the property value and the loan amount, the higher the deposit. In 2024, the average first-time buyer deposit in the UK was about ****** British pounds, but in the most expensive region, Greater London, the deposit amount was more than double. The share of the deposit was also much higher than in other regions in the UK. How has the house price for first-time buyers changed over time? Housing bought by first-time buyers has become increasingly pricier since 2000, making it harder for renters to get on the property ladder. By 2024, the average house price had tripled. The price also varied in different regions, with the North East being the least expensive and Greater London – the most expensive. Which are the most affordable areas for first-time buyers? While housing in certain areas can be pricy, this does not necessarily make it unaffordable, as the standard of living may also be higher. In 2020, the most affordable towns for first-time buyers were found in the North West region (Burnley) and Scotland (East Ayshire, North Ayshire, Inverclyde, West Dunbartonshire).

Despite the Office for National Statistics (ONS) reporting that the actual average deposit required to buy a home was ** thousand British pounds (GBP), Santander's survey of potential first-time homeowners found the average target deposit was in some cases much lower. Even in London, where the average property price in early 2019 was over *** thousand British pounds, potential first-time homeowners had a target deposit of around **** percent of the property price (**** thousand GBP).

The issue with having a lower deposit for a new home is that it puts buyers into a higher loan-to-value mortgage ratio. Those in the North East looked to achieve the highest deposit to property price ratio at ******* percent.

On average, first-time homebuyers In the United Kingdom (UK) saved up ** percent of the home price for a down payment in 2024, amounting to ****** British pounds. In Greater London, which was the priciest region to buy a home, the down payment was higher, at ** percent.

In 2024, the average age of recent first-time buyers in London was slightly higher than the England average. Across the UK, first-time buyers accounted for approximately ******* home sales. First-time buyer prices and mortgages In London, the average value of a mortgage for first-time buyers was far higher than all other regions in the UK. Apart from the initial cost of a down payment, those that can afford to, see monthly payment savings against those renting. In certain parts of the country, annual savings of buying against renting saw first time buyers amounted to over ************ British pounds. Help to buy To encourage first-time buyers, the UK government started the "Help to buy" scheme. The scheme sees people saving for a first-time home receive a ***********bonus to their savings when purchasing a house valued at ******* British pounds (******* British pounds in London). Between December 2015 and March 2018, the North West of England saw the highest number of Help to buy ISA bonuses paid.

The first-time buyer average mortgage increased across all regions in the United Kingdom in 2023. London had the largest average mortgage size at over ******* British pounds. This was because it was also the region with the most expensive hosing.

For the past decade, buying a home in the UK has been more affordable than renting one, when only considering the monthly costs. The renting versus buying gap fluctuated during the period and in 2016, it reached its highest value of 131 British pounds. In 2023, the monthly costs for a first-time buyer were 1,231 British pounds, compared to 1,258 British pounds for renters. Rental growth vs house price growth Housing costs in the UK have been on an uprise, with both renting and buying a home increasingly unreachable. Though the monthly costs of buying have consistently been lower in the past decade, house price growth has been much stronger than rental growth since the beginning of the pandemic. Additionally, buyers have been affected by the aggressive mortgage rate hikes, making acquiring their first home even less affordable. Barriers to homeownership Buying a home is not straightforward. For younger (18-40) potential first-time buyers, there are a number of barriers. Approximately one in three first-time buyers point out that raising a deposit was the main obstacle. Other reasons stopping buyers were not being able to take out a mortgage on their current income and poor credit ratings. Unsurprisingly, the highest share of people who buy a home with a mortgage was in the age group of 45 to 55-year-olds.

Since 2015, the gap between the cost of buying a home and renting has grown, with homeownership becoming increasingly less affordable. In the ***** ******* of 2024, the house price to rent ratio in the UK stood at *****. That meant that house price growth has outpaced rental growth by nearly ** percent between 2015 and 2024. The UK's house price to rent ratio was slightly below the average Euro area ratio. House price to income ratio in the UK Another indicator for housing affordability is the house price to income ratio, which is calculated by dividing nominal house prices by the nominal disposable income per head. The ratio saw an overall increase between 2015, which was the base year, and 2022. After that, the index declined, but remained close to the average for the Euro area. Is it more affordable to rent or buy? There are many things to be considered when comparing buying to renting, such as the ability to qualify for a mortgage and whether prospective homebuyers have sufficient savings for a deposit. Generally, purchasing a home is more affordable than renting one. However, the average monthly savings first-time buyers can achieve have been on the decline. In East of England, where house prices have increased rapidly over the past few years, it was cheaper to rent than to buy in 2022.