Recent data has revealed buyers with deposits worth a maximum of 15% of the property price now account for one-fifth of the current mortgage market. February’s figures from e.surv saw 20.5% of buyers contributing a deposit worth 15% or less of the property price. This national figure is up by 1.8% on the previous month.
The figure is even more notable compared to the same period last year. In February 2016, just 15.7% of buyers contributed a deposit worth 15% or less of the property price. This equates to an increase of 4.8% over the course of 12 months.
“This is encouraging news for those who are looking to get together a deposit to buy their first home,” said Darren Pescod, managing director of The Mortgage Broker. “The figures show significant growth in this sector over the past year. Hopefully, this will continue, and it may also encourage those who may not think they can save enough for a deposit to take steps towards doing just that.”
Figure rises to nearly a third of buyers in the north west
The one-fifth figure increases to nearly a third when zeroing in on the mortgage market in the north-west of England. Here, 30.8% of buyers fall into the small deposit category. Yorkshire is next in England, with 25.2% of buyers putting up a deposit of 15% or less. Northern Ireland also had a significant proportion of people assessed as small deposit borrowers, registering a figure of over 30%.
Typically, people with larger deposits usually outstrip those with small deposits. However, in Yorkshire and the north-west, this was not the case. Indeed, Yorkshire has seen a huge increase in the percentage over recent months. In December, small deposit purchasers accounted for 24% of the market in that area. Fast-forward to January, and that figure had reached 31.6% of the market.
The largest deposits are seen in London
It will be of little surprise to learn that buyers in London are scraping together the largest deposits on properties. Around 43% of buyers in the city provided deposits worth 60% of the property price or more. There was a sharp contrast with buyers who fell into the small deposit category here, too. just 12.8% of buyers in London had a deposit worth 15% or less of the property price. This was the lowest figure of all the areas included in the survey.
Large deposit buyers dominate in five key areas
A large deposit is one assessed as worth 60% or more of the purchase price. The research for January revealed five areas where this accounted for over a third of the market:
- Scotland (38.4%)
- Eastern England (37%)
- South and South Wales (36.8%)
- London (36.7%)
- South East (35.5%)
Smaller deposits are far more likely to be put together by first-time buyers, while larger ones are typically put together by those moving up the housing ladder. We shall be watching both closely in the coming months to see what happens next.