Keir Starmer’s claim about first-time buyers’ deposits based on estimate of future increases

“It is not just those who already own their home who are counting the cost of Tory recklessness. The average deposit for a first-time buyer is going up to £9,000.”

At Prime Minister’s Questions (PMQs) on Wednesday 3 May, Labour leader Sir Keir Starmer said that the average deposit for a first-time buyer “is going up to £9,000”, and that saving this amount would take four years for the average saver.

Labour has since confirmed that Mr Starmer intended to refer to deposits increasing by £9,000—and he did indeed imply this later in PMQs, when he referred to first-time buyers needing “an extra” £9,000 for a deposit.

Labour told Full Fact that the £9,000 figure is based on a report published by the planning and development consultancy Lichfields.

The report, published in February, looks into the potential impact of the government’s proposed changes to the National Planning Policy Framework, which it claims would substantially reduce new housing supply

It appears to estimate that, under the proposals, by 2030 an extra £8,700 in savings would be needed for a “typical deposit by first-time buyers”. (The figure is introduced as follows: “By 2030, compared with what would happen by maintaining the current rate of housebuilding (which itself is not enough and will lead to adverse outcomes), the cut in supply caused by proposed changes to the NPPF will lead to a series of adverse consequences.”) We don’t have any further details on how this figure is calculated, but we have asked Lichfields and will update this fact check if we hear back.

The figure in the Lichfields report seems to be a hypothetical estimate for what a typical deposit for a first-time buyer might be by 2030, not an illustration of the current situation for first-time buyers, as Labour MP Chris Elmore claimed in a tweet shared during PMQs which said “new buyers now need an additional £9,000 for a deposit”. However, this was not made clear in Mr Starmer’s comments.

Selective use of data without appropriate context and caveats can damage public trust in politicians. MPs should use official information transparently and with all relevant context and caveats when a claim is first made, and quickly rectify oversights when they occur. We’ve contacted Mr Elmore about his tweet and will update this piece if he responds.

How much has the average first-time buyer’s deposit actually increased?

We’ve seen various different estimates for the average deposit of a first-time buyer. According to the latest published data from the government’s English Housing Survey, the average (mean) deposit of a first-time buyer in 2021-22 was £43,693.

This is actually slightly lower than the government’s figure for the average (mean) deposit of a first time-buyer in 2020-21, of £44,294. 

However the median deposit of a first-time buyer increased by £5,000, to £30,000, over the same period.

Other estimates also suggest there has been a recent rise in the size of the average first-time buyer deposit. For example, the building society Halifax estimated in January that the average deposit for first-time buyers UK-wide rose from £57,883 in 2021 to £62,470 in 2022. 

We’ve asked Labour to confirm the source for its claim that it would take the average saver four years to save £9,000, and will update this piece if it responds.

Image courtesy of Chris McAndrew