Deposits fall as Help to Buy kicks in: Murphy

The head of lending at national mortgage advisory firm Mortgage Advice Bureau, said: “Raising a deposit has long been the biggest challenge for first-time buyers in the current climate.

“It’s encouraging to see a situation emerging where deposit requirements need not block aspiring buyers from taking advantage of growing choice and improving rates.”

His comments came as MAB’s latest National Mortgage Index revealed that the typical homebuyer applied for a mortgage with a deposit of £66,259 in December 2013. In September 2013, prior to the introduction of the Help to Buy scheme, the figure was £70,365.

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The Index, which is created from data provided by more than 500 brokers and 800 estate agents, also showed that total mortgage product numbers rose for a third successive month to a new record of 12,106 in December, while three year fixed rates and two-year tracker rates both hit their lowest point for six and a half years.

The figures identified that buyers in greater London, the southeast and southwest of England, where deposits are the highest, appeared to benefit most from the growing availability of low deposit mortgages at the end of 2013.

The typical buyer deposit fell by 12 per cent in the southeast from September to December, by 7 per cent in greater London and by 4 per cent in the southwest.

Mr Murphy added: “Competition breeds choice and buyers with limited savings for a deposit can pick and choose from a growing range of high LTV products, whether or not they opt for the government-backed Help to Buy route.

“The stagnant property market of recent years has been firmly consigned to the past and activity levels look set to keep on rising this year.”

Adviser view

Scott Mackintosh of Independent Women in Edinburgh said: “I would echo Mr Murphy’s view that things are improving and that Help to Buy is contributing by supporting first-time buyers. Without it they would never get onto the property ladder.

“Things are definitely better than they were two to three years ago.”

How purchase prices and buyer deposits performed in Q4 2013


Purchase prices

Buyer deposits










North West





Yorkshire and Humberside










West Midlands





East Midlands





East Anglia





South East





South West





Greater London










All figures quoted are based on three month averages. Source: MAB