According to research from the Mortgage Advice Bureau, on average, prospective buyers would need to save around £36,118 for their deposit.
However, three in five said that this had grown, expecting to need an additional £11,500 for a deposit.
Around 15 per cent of prospective buyers are delaying their plans to buy altogether and nearly a third said that saving for the deposit was one of the biggest barriers to homeownership.
A quarter said that the higher cost of borrowing would mean they would have to save more and 11 per cent said that the need to save has increased due to them wanting a lower loan to value (LTV) deal.
Approximately eight per cent are using the Bank of Mum and Dad to help get on the property ladder.
In a bid to save more a quarter are cutting back on socializing and a further quarter were reducing expenditure on luxuries.
‘Challenges from all sides’
Ben Thompson, deputy CEO at Mortgage Advice Bureau, said: “There are many challenges for prospective buyers to overcome before they get the keys in their hands, and right now, they’re coming from all sides.
“Economic volatility has seen prospective buyers battle high inflation, pushing prices up and limiting the amount they can save. Meanwhile, higher interest rates have lowered the amount they can borrow, meaning bigger deposits are needed. This has led to many prospective buyers having to put more away than they had initially planned.”
He added: “Nevertheless, there are some positives that can be taken from this. For those saving for a mortgage, it’s time to take advantage of higher interest rates on savings, with fixed rate accounts in particular offering good rates.
“Government initiatives, like the Lifetime ISA and Help to Buy ISA (for those who had an account before the scheme closed) can also help. Whatever stage you are at, it’s worth talking to a broker who can help you get mortgage ready.”
