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More than 75 per cent overestimate deposit needed to buy a new home

More than 75 per cent of people in Gloucestershire asked to estimate the deposit needed to buy a £250,000 new home massively overestimated how much was needed.

Using the government’s Help to Buy scheme, buyers need just £12,500 for the deposit but a survey by housebuilder Barratt Homes reveals that more than 75 per cent questioned believed they would have to save at least £15,000.

More than 30 per cent believed they would need to save between £25,000 and £30,000, more than double the real amount.

Adam Champion from mortgage company The New Homes Group said the figures are in line with buyers’ expectations.

“Most people think you need at least a 10 per cent deposit on a new home when we start talking to them and are pleasantly surprised by the true figure of just five per cent,” he said. “In Leonard Stanley for example people need just £14,750 to buy a three bedroom home at Saxon Gate.”

Barratt Homes sales director Andrea Pilgrim said the figures should be welcomed by anyone considering buying a new home.

“Historically-low interest rates, together with Help to Buy and a wealth of mortgage options available at the moment, make now an excellent time to buy,” she said. “Despite some uncertainty over Brexit the new homes market is extremely busy and the more people know about the low deposits the more people can move into their dream home.”

The survey also highlighted awareness of low deposits in the different age groups. Although everyone asked overestimated the amount needed, the amount estimated rose with age.

Those between 18-24 years old believed they would need to save an average of £19,000 for a deposit while the over 55s guessed a deposit would cost in excess of £23,000.

“Schemes such as Help to Buy are available to all ages but it is mainly first time buyers who have benefitted from the help so it is good to see the younger people are closer to the right figure,” said Andrea.

For more information about Barratt and Help to Buy, please visit barratthomes.co.uk

This was posted in Bdaily's Members' News section by Barratt Homes .