English Homes Got Cheaper to Buy, Deposit Still Hurts

House prices and incomes moved closer in England

England’s housing market has produced a rare split signal. On paper, homes have become more affordable relative to earnings, but for first-time buyers the cost of getting through the front door remains painfully high. Bloomberg reported on March 26, citing fresh Office for National Statistics data, that homes in England are the most affordable they have been since 2015 on a house-price-to-income basis. But that improvement has not removed the biggest obstacle facing new buyers: the deposit and the cost of servicing a mortgage.

Why housing affordability in England improved

The improvement has come mainly from earnings growth rather than a broad-based fall in prices. In the latest fully published ONS affordability bulletin for 2024, the median house price in England was £290,000 and median annual earnings were £37,600, producing an affordability ratio of 7.7, down from 8.4 a year earlier. The ONS said three consecutive annual improvements had taken affordability back to levels similar to those seen in 2018, 2019 and 2020 after the sharp deterioration during the pandemic period. The 2025 ONS release was published on March 26, 2026, and that is the release Bloomberg cited when it said England had reached its best affordability reading since 2015.

Nationwide Building Society’s January affordability report pointed in the same direction. It said affordability constraints had eased because earnings growth was outpacing house price growth and mortgage rates had been declining gradually. That combination helped underpin buyer demand through 2025 even though conditions remained stretched by longer-term standards.

What official data show about English house prices

The improvement in affordability does not mean housing is cheap. The ONS said the average house price in England was £290,000 in January 2026, up 1.1% from a year earlier. Price growth has slowed sharply compared with the post-pandemic years, but the absolute level remains high, especially across southern England and London.

Bloomberg made a similar point last year when it reported that London homes had become the most affordable they had been in a decade while still remaining far out of reach for many buyers. In British housing analysis, homes are often described as affordable only when prices are no more than five times annual earnings. Much of England remains above that threshold.

Why the deposit remains the biggest barrier

The biggest problem has shifted from headline affordability to upfront cash. Nationwide estimates that a typical 10% deposit on a UK first-time buyer property is now around £23,000. Based on saving 10% of average net pay, roughly £320 a month, a prospective buyer would need nearly six years to build that deposit. In London the process would take about nine years, compared with around four years in the North.

Halifax shows how high the real-world entry cost has become. According to its first-time buyer analysis, the average first-time buyer in 2024 put down a deposit of £61,090 and paid £311,034 for their first home, meaning the deposit averaged about 20% of the purchase price. Halifax also said the average first-time buyer was 33 years old, the oldest in two decades. Those figures explain why better affordability ratios have not translated into an easy entry to the market.

How mortgages and rents are still squeezing buyers

Saving the deposit is only the first hurdle. Nationwide said a buyer on the average UK income purchasing a typical first-time buyer home with a 20% deposit would face monthly mortgage payments equal to 32% of take-home pay. That is below recent peaks, but still above the long-run average of 30%. In other words, mortgage servicing has become a little easier, but not genuinely cheap.

Nationwide’s year-end housing outlook made the same point from another angle. It said that during much of 2024 a typical mortgage rate for someone with a 25% deposit was around 4.5%, roughly three times the 1.5% level seen in late 2021 before the Bank of England began raising rates. At the same time, record rent growth made it harder for tenants to save for a deposit in the first place.

How first-time buyers are adapting

The government’s English Housing Survey shows how households are adjusting to those pressures. In 2024-25, 59% of first-time buyers put down a deposit of less than 20% of the purchase price. Within that group, 16% paid less than 10%, while 43% paid between 10% and 19%. The same survey found that 62% of first-time buyers with a mortgage had a repayment term of 30 years or more. That means many buyers are responding by reducing their upfront cash contribution and stretching repayments across longer periods.

Family support remains central to the market. The English Housing Survey said 86% of first-time buyers used savings, while 31% reported receiving help from family or friends. Nationwide’s estimate points in the same direction, saying that more than a third of first-time buyers in 2024-25 had some assistance with their deposit, whether through gifts, loans or inheritance. The methodologies differ, but the conclusion is the same: first-time buying in England still often depends on access to family capital.

What this means for the English housing market

The market has become more affordable statistically, and that matters. But it has not become easy. If housing is measured only as a ratio of price to income, conditions are clearly better than they were in recent years. If the actual purchase journey is taken into account, buyers still face a high deposit requirement, long mortgage terms and, in many cases, outside support. That is why the same story can contain both an affordability improvement and a warning that the deposit hurdle remains firmly in place.

As International Investment experts report, England’s housing market entered 2026 in a more balanced position than during the post-pandemic overheating phase, but the main obstacle for young households and first-time buyers is no longer just the headline price of a home. It is the cost of entering the transaction itself. Affordability has improved in statistical terms, yet in practical terms the market still demands years of saving, stable earnings and very often family assistance.

FAQ

Why did Bloomberg say English homes are the most affordable since 2015?
Because Bloomberg, citing fresh ONS data published on March 26, said the house-price-to-income ratio in England had fallen to its lowest level since 2015. The improvement was driven mainly by earnings rising faster than house prices.

What is a housing affordability ratio?
It is the ratio of a home’s price to annual earnings. A lower ratio generally means housing is easier to afford on paper. The ONS uses this measure for England and Wales.

Why has affordability improved without solving the first-time buyer problem?
Because buyers still need a large deposit and must meet mortgage payments that remain elevated relative to the very low-rate years before 2022.

How much deposit is typically needed now?
Nationwide says a typical 10% deposit on a UK first-time buyer property is around £23,000. Halifax says the average actual first-time buyer deposit in 2024 was £61,090.

How common is family help for first-time buyers?
It is still very common. The English Housing Survey says 31% of first-time buyers received help from family or friends, while Nationwide says more than a third had deposit assistance.