Mortgage rates pushed up by the conflict in Iran have forced the typical London buyer to add roughly £35,500 to the cash needed for a deposit.
The average deposit in the United Kingdom is now about £18,400 higher than in January, with the capital seeing the steepest jump, according to data from property portal Zoopla. Lenders raised five‑year mortgage rates from below four per cent at the start of the year to around 4.8 per cent, after an initial spike to 5.54 per cent following the first strikes on Iran.
That rise translates into an extra £35,000 for London purchasers, more than three times the additional £10,200 required by buyers in the North East. First‑time buyers feel the pressure most acutely because they tend to take longer loan terms and larger mortgages.
Housebuilders Bellway and Barratt Redrow, together with portal Rightmove, have called on Andy Burnham to cut stamp duty for first‑time buyers, arguing that easing the upfront cost could revive demand.
Zoopla's research team notes that prospective owners can either wait for rates to fall, target cheaper homes, accept higher monthly payments, or increase their deposit to soften the impact. While fewer sales have been agreed compared with last year, the platform reports a 7 % rise in home‑search activity, suggesting a potential autumn rebound.
Tom Bill, head of residential research at Knight Frank, expects a modest bounce in activity later in the year, but cautions that any increase in tax speculation from September could dampen momentum.