Skyrocketing Deposits THREATEN First-Time Buyers

First-time homebuyers face new challenges as housing deposit demands skyrocket, raising concerns about affordability and accessibility.

Story Snapshot

First-time buyers in the UK now need an average of £23,000 for a 10% deposit.
London buyers face the greatest challenge, requiring £44,800 for a deposit.
Nationwide Building Society highlights improved market conditions, yet regional disparities persist.
Affordability improvements benefit some, but gaps remain, especially in London.

Nationwide’s Research on Housing Deposits

Nationwide Building Society recently revealed that first-time buyers in the UK typically need £23,000 for a 10% deposit on an average property. This considerable sum equates to nearly six years of saving 10% of the average net pay, which is approximately £320 monthly. The report highlights stark regional disparities, with London requiring a daunting £44,800 for the same deposit, while the North East requires only £13,100.

These figures emphasize the ongoing challenge of housing affordability in the UK. Despite improvements in market conditions, including earnings growth outpacing house prices and a decline in mortgage rates, first-time buyers still face hurdles. The affordability gains have yet to balance out the immense regional disparities, particularly in London, where the price-to-earnings ratio remains significantly high.

The amount first-time buyers typically need for a deposit revealed https://t.co/FcwvCoMig6 pic.twitter.com/KTRy49t9BZ

— The Independent (@Independent) January 20, 2026

Impact of Regional Disparities on Buyers

The necessity of a £44,800 deposit in London underscores the severe affordability crisis facing buyers in the capital. This situation contrasts sharply with regions like the North East and Scotland, where deposits and savings times are significantly lower. These disparities illustrate a persistent North-South divide affecting the housing market, with London maintaining a price-to-earnings ratio of 7.5 compared to Scotland’s 2.9.

Nationwide’s report further reveals that over a third of first-time buyers in 2024-2025 received family assistance to meet deposit requirements. This reliance on family support underscores the ongoing financial strain on young buyers, especially those in high-cost areas like London and the South East.

Prospects for First-Time Buyers

Despite these challenges, the housing market shows signs of optimism for first-time buyers. Nationwide’s Senior Economist, Andrew Harvey, notes that affordability has improved, with mortgage payments now accounting for 32% of take-home pay compared to a long-run average of 30%. However, the occupational variances and regional differences remain a barrier for many.

The report suggests that continued earnings growth and further declines in mortgage rates could help bridge these gaps. However, without addressing the root causes of regional disparities, such as the high cost of living in metropolitan areas, the divide is likely to persist, hindering equal access to homeownership for all first-time buyers.