Despite falling property prices, the typical deposit needed to buy a home keeps rising. Mortgage data company m.form claims that buyers in England and Wales now need a deposit of £37,119 to qualify for a leading mortgage rate on an averagely priced property of £180,000. That is a 43 per cent jump on the £20,980 needed last year. Of course, deposit levels vary considerably around the UK. London homeowners need to scrape together £71,616, followed by those in the South-east on £46,843. In the North-east and North-west of England, m.form says that an average of £28,000 should do it.
And as lenders continue to tighten lending conditions, property prices just keep falling. Latest figures from Hometrack report that the average UK property value fell 0.9 per cent over the month, compared to a 1.2 per cent drop in July. The Hometrack survey showed that average property prices fell in nearly 60 per cent of postcodes in England and Wales, most sharply in East Anglia, London and the South-west. It reveals the average sale is going through at 10 per cent below the asking price, and warns that we could see two to three years of further reductions, before values return to "realistic" levels.
GO FIGURE... 15
The number of steps the Royal Institution of Chartered Surveyors (RICS) says the Government needs to take to help out the housing market. The RICS action plan includes measures to improve liquidity in the marketplace, calling on the Government to issue new mortgage-backed securities to allow the original lender to issue more mortgages; tax-free saving schemes; a short-term stamp duty holiday; rescue plans for those facing repossession and regulatory reform to make it easier and more attractive for social landlords to develop and rent affordable homes and to bring empty properties back into use.
Paula John is editor-in-chief of 'Your Mortgage'Reuse content