Are you currently saving up for a first house, or do you know somebody who is? Raising a deposit is now widely understood to be the biggest barrier to getting on the property ladder for younger people – with 10% and above expected as standard. 

The pandemic has also disproportionately affected young people in terms of employment opportunities, creating further challenges for would-be first-time buyers. Yet new research from equity release experts Key Advice has found that older relatives who are homeowners helped out by gifting an average of £42,500 in 2020. 

This figure is almost two-thirds of the average first-time buyer deposit of £57,278, a figure which is skewed somewhat by astronomical living costs in London. 

So how much do first-time buyers need to raise for deposits across the UK – and where exactly are they receiving the most financial help? 

How do first-time deposits compare across the UK?

It will come as no surprise to many that UK first-time home deposits are highest in the capital of England, at a staggering £130,357. 

That’s almost £70,000 more expensive than the next costliest region, the South East of England, where first-time deposits average out at £64,910. The South West is next up, with £51,397 required to purchase the average first home. 

At the other end of the scale, first-time buyer deposits are at their lowest – £29,523 – in Northern Ireland. The North East of England and Wales offer the next cheapest property with deposits of £29,563 and £32,663 respectively. 

Which residents are most generous? 

Key Advice’s report found also that older homeowners gifted younger relatives more than the money required for a deposit in some areas.

In Wales, for example, older relatives gifted younger family members 135% of the average first-time deposit on average. Those in Northern Ireland, the North East of England and the East Midlands were also extra generous, gifting 116%, 113% and 108% respectively. 

These figures contrast those seen in the North West of England, where donations added up to only 67% of the average first-time deposit required in the area. London homeowners offered up around 79%, which is impressive considering this represents an average gift of £102,826. 

How equity release can boost first-time buyer deposits   

It’s common for older family members to support young people at this stage in their lives, and gifting is a popular way to do it. This can be done through spare savings or equity release, which involves freeing up cash that’s tied up in property. 

Helping out younger family members is a key motivation for many equity release customers, with some £755 million being donated through this route last year alone.

With property prices booming so far in 2021, first-time buyers will likely have to rely on older relatives more than ever.