Homebuyers need an average deposit of nearly £40,000 in order to qualify for a best-buy mortgage deal, research has shown.
People buying an average priced house in England and Wales of £180,781 would need a deposit of about £37,119 to secure a competitive mortgage rate, according to mortgage company mform.co.uk.
The figure is 43 per cent higher than the £20,980 they would have needed to secure a leading rate last year.
The group said that despite house prices falling, the amount of money people needed as a deposit was rising as lenders became increasingly risk averse and scaled back the loan-to-value ratios they were prepared to advance.
It said people now needed an average deposit of 20.75 per cent of their home’s value to secure a best buy mortgage rate, nearly double the 11.75 per cent they would have needed a year ago.
Popular two-year fixed rate mortgages have seen the biggest increase, with average deposits on these deals soaring from ten per cent in August last year to 23 per cent now for leading rates.
But buyers also need an average deposit of 22 per cent of their home’s value to get a leading three-year fix and 20 per cent to get a top five-year one.
Homeowners in London need to amass the biggest deposit of £71,616 to buy an averaged priced home of £345,000, followed by those in the South East at £46,843.
Even in the North East and North West, where property is cheapest, people would still need to save nearly £28,000 to qualify for a leading mortgage rate.
Francis Ghiloni, marketing and business development director at mform.co.uk, said: “Availability of mortgage deals remains the biggest issue for borrowers who do not have equity in their homes.”