0

The stamp duty holiday may have worked wonders in reviving homebuyer demand but research from national estate agent, Keller Williams UK, has highlighted the downside to buoyant market conditions, as the cost of the average mortgage deposit has climbed by £11,000 in some areas of the UK market.

Keller Williams UK looked at the cost of buying a home based on the average mortgage deposit at 15% of property value and what this looks like in the current market when compared to June of last year when the stamp duty holiday first launched.

At £234,474, the current UK average house price requires homebuyers to stump up £38,461 for a 15% mortgage deposit.

PJPB – Salboy – MPU

This is £3,249 more than the average 15% deposit of £25,212 prior to the launch of the stamp duty holiday – a 9% jump.

Largest increases (£)

The South West is the region to have seen the largest monetary jump in the average cost of a deposit, up £4,196 since the start of the stamp duty holiday.

The South East has also seen an increase of more than £4,000, closely followed by the East of England (£3,498) and London (£3,180).

At local authority level, Hammersmith and Fulham has seen the largest jump with the average 15% deposit climbing by £11,458 when compared to June of last year.

The initial cost of buying in Elmbridge (£11,223) and Haringey (£10,052) has also climbed by more than £10,000 as a result of the stamp duty holiday, with homebuyers in Rutland (£9,641) and Stratford-on-Avon (£9,236) also facing a considerably tougher task.

Largest Increases (%)

Of course, property affordability isn’t just related to the monetary jump in the cost of a mortgage deposit and while some areas of the UK market have seen a smaller increase in the actual sum, they rank with the largest jumps in terms of the percentage increase in the cost required.

In this respect, the North East has seen the biggest increase in the cost of a mortgage, climbing 13% as a result of the stamp duty holiday.

Yorkshire and the Humber has seen a 12% jump, while the North West, South West and Wales have seen an 11% increase. Both regions of the Midlands have also seen a double-digit increase in the cost of a 15% mortgage deposit (10%).

Again, this increase is greater at local authority level, with Carmarthenshire seeing a 25% increase in the cost of a mortgage deposit.

Manchester, Oadby and Wigston, East Renfrewshire and Rutland have also seen some of the largest increases at 22%.

CEO of Keller Williams UK, Ben Taylor, commented:

“The stamp duty holiday is now effectively over for all but those in the final stages of a transaction due to the long market delays that have accumulated at the back end of the process.”

“Much like a night out when you have work the next day, it certainly seemed like a good idea at the time, but current homebuyers will be wondering if it was really worth it given that they now face a considerably larger financial hurdle to homeownership.”

“This reduction in affordability has been felt right across the UK with southern regions seeing the largest monetary jump, while those in the north are facing the highest increase versus what they were paying previously.”

“While the end of the stamp duty holiday will no doubt bring a natural correction to an otherwise overheating market, it’s unlikely to cause prices to crash and so the cost of buying looks set to remain a tough ask for those yet to climb the ladder.”

Table shows the current average house price and the cost of a 15% mortgage deposit versus the average house price in June 2020 when the stamp duty holiday launched
Location AveHP June 2020 Average deposit June 2020 (15%) AveHP March 2021 Average deposit March 2021 (15%) Change in deposit £ Change in deposit %
North East £129,432 £19,415 £145,893 £21,884 £2,469 13%
Yorkshire and The Humber £168,083 £25,213 £188,575 £28,286 £3,074 12%
North West £168,932 £25,340 £187,924 £28,189 £2,849 11%
South West £259,679 £38,952 £287,650 £43,147 £4,196 11%
Wales £167,653 £25,148 £185,431 £27,815 £2,667 11%
East Midlands £199,061 £29,859 £219,950 £32,993 £3,133 10%
West Midlands Region £201,785 £30,268 £220,982 £33,147 £2,880 10%
South East £321,884 £48,283 £348,615 £52,292 £4,010 8%
East of England £291,736 £43,760 £315,059 £47,259 £3,498 8%
Scotland £154,871 £23,231 £166,566 £24,985 £1,754 8%
Northern Ireland £140,841 £21,126 £149,178 £22,377 £1,251 6%
London £479,107 £71,866 £500,310 £75,047 £3,180 4%
England £250,865 £37,630 £274,615 £41,192 £3,563 9%
United Kingdom £234,747 £35,212 £256,405 £38,461 £3,249 9%
Data sourced from the Land Registry UK House Price Index – June 2020 to March 2021 (latest available data)
Mortgage deposit cost based on the average mortgage deposit of 15% applied to the average house price at both points in time (Source: Trussle)
Table shows the areas of the UK to have seen the largest £ increase in the cost of a mortgage deposit as a result of the stamp duty holiday
Location AveHP June 2020 Average deposit June 2020 (15%) AveHP March 2021 Average deposit March 2021 (15%) Change in deposit £ Change in deposit %
Hammersmith and Fulham £728,128 £109,219 £804,517 £120,677 £11,458 10%
Elmbridge £587,142 £88,071 £661,964 £99,295 £11,223 13%
Haringey £540,014 £81,002 £607,029 £91,054 £10,052 12%
Rutland £297,486 £44,623 £361,762 £54,264 £9,641 22%
Stratford-on-Avon £292,268 £43,840 £353,840 £53,076 £9,236 21%
Data sourced from the Land Registry UK House Price Index – June 2020 to March 2021 (latest available data)
Mortgage deposit cost based on the average mortgage deposit of 15% applied to the average house price at both points in time (Source: Trussle)
Table shows the areas of the UK to have seen the largest % increase in the cost of a mortgage deposit as a result of the stamp duty holiday
Location AveHP June 2020 Average deposit June 2020 (15%) AveHP March 2021 Average deposit March 2021 (15%) Change in deposit £ Change in deposit %
Carmarthenshire £146,488 £21,973 £183,129 £27,469 £5,496 25%
Manchester £172,625 £25,894 £211,107 £31,666 £5,772 22%
Oadby and Wigston £225,760 £33,864 £275,165 £41,275 £7,411 22%
East Renfrewshire £209,085 £31,363 £254,649 £38,197 £6,835 22%
Rutland £297,486 £44,623 £361,762 £54,264 £9,641 22%
Data sourced from the Land Registry UK House Price Index – June 2020 to March 2021 (latest available data)
Mortgage deposit cost based on the average mortgage deposit of 15% applied to the average house price at both points in time (Source: Trussle)
SUBSCRIBE
Subscribe to our weekly newsletter
Stay informed with our leading property sector news, delivered free to your inbox. 
Subscribe
Your information will be used to subscribe you to our newsletter and send you relevant email communications. View our Privacy Policy
Property Notify
Property Notify is a leading property sector publisher reporting on breaking news and political changes affecting the UK property industry, in addition to finance, tax and investment coverage we provide a hub to explore, contribute, invest in and celebrate the property industry. - Read more.

    GoCompare Becomes Latest Household Name to use Mojo’s Hybrid Brokering Service

    Previous article

    Annual Price Rise of 8.9% in Latest UK House Price Index

    Next article

    You may also like

    Comments

    Leave a reply

    Your email address will not be published. Required fields are marked *