First time buyer deposits in the UK are soaring by 15% a year due to lower stamp duty bills for new purchasers, according to a recent analysis.
Robert Holmes, an estate agents in Wimbledon mentioned that the average deposit was £29,127 in January, an increase of 7% in comparison to  December 2014, with first-time buyers saving the largest amount for their deposit since July 2013 a year and a half ago as savings from December’s stamp duty changes come into effect.
Long Awaited Stamp Duty Reforms
At the end of last year, Chancellor George Osborne announced long-awaited reforms to the ‘slab’ stamp duty system; these changes will benefit some 98% of buyers. These revisions have reduced upfront costs for lots of first-time buyers meaning they can use that cash to build their deposit. The average first-time buyer paid around £1600 before the graduated system was introduced, saving them roughly £900.
The report also said that rising purchasing power is reflected in the average first-time buyer Loan-to-Value (LVT) ratios, and that these have fallen 1.1% over the last three months; indicating that deflation and increasing wages are allowing first-time buyers to accumulate larger deposits.  Prices for first-time buyer homes have in turn increased, with new buyers paying an average of £160,304 in January; this is up 12% in comparison to a year ago. Deposits now represent 75.4% of a first-time buyer’s income in comparison to 70.6% a year ago.
House Prices Have Been Pushed Up
The irony is that while stamp duty has saved first-time buyers money that they can invest in their property, house prices have been pushed up due to the changes. This is because whereas before the value would cluster around the thresholds, now people can simply ask for more (ie it makes no difference now if a property is worth £250,000 or £250,001.
Adrian Gill, director of estate agents Your Move and Reeds Rains Your Move who wrote the report said: “A fusion of economic factors is alleviating some of the financial burden of forming a deposit. Wages are starting to recover and inflation has fallen to a record low, meaning buyers have slightly more cash to play with day to day. And stamp duty fees were slashed for many new buyers when the government reformed the old slab system, freeing up further funds. It’s still difficult to save, with savings rates tied closely to the low base rate. But it’s easier to put cash aside than it was a year ago.”
London Continues To Attract
However, London is still very popular as a cultural capital and professional hub and continues to attract buyers from other areas, despite the higher average price tag. Inner London still remains very expensive, but there are other family-friendly, affluent areas that remain more attainable; such as Wimbledon, where demand remains strong among young professionals. 
The data also demonstrated that there were 21,200 first-time buyer completions in January 2015 – this is some 19% lower than 26,100 at the end of last year. A fall in first-time buyer numbers is to be expected between December and January generally due to the Christmas lull. However, in the run up to the election property went going up in price in London in February by 2.1%, or £5,729.