Half of all prospective first-time buyers (55%) are currently seeking to raise a larger deposit than initially intended due to soaring homebuying costs.

This is according to Aldermore’s latest First Time Buyer Index, a survey of 2,000 prospective first time buyers, which reveals the impact of the ongoing volatility in the property market on prospective buyers’ plans.

On average, prospective buyers in the UK are planning to raise £47,067 for a deposit.  Despite this, nearly three out of four potential buyers (72%) recognise the long-term value of home ownership and believe owning a home is a great investment for the future.

In addition to raising a larger deposit, nearly half (49%) are planning to buy a house of lower value than they initially thought, as higher interest rates have increased average monthly repayments, making home ownership less affordable. On average, prospective buyers would at most consider spending 30% of their monthly income after tax on their mortgage.

However, in light of rising home purchasing costs, half of prospective buyers (50%) are opting to put their homebuying plans on hold in the hope property prices drop further.

Regionally, the most expensive cities for first time buyers to raise a deposit are London and Oxford, with buyers having to put forward £145,272 and £132,101 respectively. Meanwhile the cheapest city to raise a deposit is Sunderland (£21,117), marking a stark different from the Capital, where buyers are putting down six times more for their deposit.

For the same price as an average deposit in London, buyers in Sunderland could purchase a property outright (average first time buyer selling price: £125,586) decorate and furnish it (national average: £14,410) and have £5,276 left over.

Aldermore head of mortgages Jon Cooper comments: “The property market has been a difficult environment to navigate following the considerable volatility we saw in late 2022. Homeownership is increasingly expensive, and first time buyers are having to raise larger deposits and lower their budgets accordingly. While this may be disheartening, first time buyers can still find their way onto the property ladder”.