First timers looking to get onto the property ladder now need a higher deposit for their mortgage than they have at any time in the past year, a new study has shown.
According to the latest findings from Genworth/Moneyfacts, the average newcomer to the property market will need a down payment of some £32,000 on average in order to secure a mortgage.
Despite Help to Buy providing those with small deposits access to high value loan-to-value mortgages across the last couple of years, the amount that banks and other lenders are willing to give to mortgage customers is actually going down generally.
According to the data, October last year saw the average deposit percentage fall to a low of 16 per cent of the overall mortgage. However, this is now as high as 20 per cent, the highest reading in a year, as of the end of June this year.
June's figure of 20 per cent was also found to be the same level as we saw in the market two years ago in the same month. Crucially, this was before the Help to Buy scheme came into play, bringing into question the effect that it has had since it was introduced.
The report states that in real terms, when house valuation increases are also considered, the price of a deposit for getting onto the property ladder has climbed by some nine per cent in the last two years.
Genworth and Moneyfacts highlighted the difficulty that first timers have getting onto the ladder at present. Despite the introduction of Help to Buy in the last couple of years, the average deposit of almost £32,000 still represents 81 per cent of the average annual income of this demographic, showing just how hard it is to get onto the property ladder.
"Rising house prices and a lack of supply are exacerbating the situation and leave hopeful first time buyers scrambling to save a deposit as quickly as possible, before the dream of homeownership gets any further out of reach," said Simon Crone, Genworth vice president for mortgage insurance Europe.