First time buyers to see deposits soar to £60,000 in just a decade

First time buyers to see deposits soar to £60,000 in just a decade
First time buyers to see deposits soar to £60,000 in just a decade

FIRST-time buyers in Scotland will have to pay nearly £60,000 up front to secure a home within the next decade prompting fears thousands of Scots will struggle to ever get on the property ladder.

New figures show that househunters in Edinburgh should expect a 55 per cent hike in the average cost of a deposit by 2027 – meaning their first home will require a £58,204 down payment.

According to L&C Mortgages, the average deposit will have rocketed to more than £47,000 in just five years as a growing housing shortage forces prices to soar.

In Glasgow, prospective home owners will be forced to pay around £33,000 in advance – up from £22,000 today.

READ MORE: Herald View - Life is only going to get harder for first-time buyers

Steadily rising house prices combined with the credit crunch has left many young people in Scotland in rental purgatory.

The Scottish Government has pledged to build 25,000 affordable homes a year over the next decade to help alleviate the problem and have also scrapped the controversial right of tenants to buy their own council homes.

The Chancellor Philip Hammond announced last month that stamp duty on homes under £300,000 would no longer apply to try and boost the market the rest of the UK, while in Scotland all house sales under £145,000 are exempt for the Land and Buildings Transaction Tax.

The slow-down in the property market has led to the number of private tenancies across Scotland more than tripling to around 370,000 since devolution.

Across the UK, the average first-time buyer will have to pay 28 per cent of the value of homes by 2027.

But house hunters in London will see deposits rise to £244,842 over the same period, which is a staggering rise of 75 per cent in a decade.

David Hollingworth of L&C said: “With this research predicting that the size of deposits required could rise considerably across the country, first-time buyers could be forgiven for giving up hope on owning their first home.

“It makes sense for first-time buyers to try and raise as big a deposit as possible but that is very much easier said than done in today’s current climate."

READ MORE: Herald View - Life is only going to get harder for first-time buyers

Critics have already warned of a major housing crisis looming unless tens of thousands of affordable homes are built in the next few years.

The 2016 Scottish Household Survey showed the overall number of homes in Scotland increased from 2.19 million in 1999 to 2.45 million last year - a rise of 11 per cent.

But over the same period, the number of homeowners has slumped, while social housing is at a record low.

According to the survey, the percentage of households who rent privately has grown from five per cent in 1999 to 15 per cent last year.

Two-fifths of people who are not already on the property ladder think they will never get a foot on the first rung, largely because of the decline in house building and tougher mortgage rules.

House prices in Scotland have also continued to rise and the average of £149,185, an increase of almost five per cent from the previous year.

READ MORE: Herald View - Life is only going to get harder for first-time buyers

Mr Hollingworth added: “Pulling together a deposit continues to represent one of the single biggest challenges and these forecasts will make frightening reading for aspiring first-time buyers. “Although improvements to supply of the right type of housing will be required, it is clear that from a practical point of view first-time buyers will need to try to make regular savings as early as possible.”

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