Deposits reach 14-month high

After increasing by £2,249 from November deposits averaged £71,078 – 30.7% of the value of typical UK property (£231,487).

This is the highest deposit level since October 2013, the same month the Help to Buy mortgage guarantee was introduced.

Since Chancellor George Osborne reformed Stamp Duty from its previous ‘slab system’ from 4 December buyers have saved an average £1,300, while those paying just over £250,000 have made savings of up to £5,000.

Brian Murphy, head of lending at Mortgage Advice Bureau, said: “December's Stamp Duty announcement was an early Christmas present for many aspiring buyers.

“Having extra funds to put towards a deposit can not only help to limit borrowing commitments and give people more bargaining power.

“It can also allow access to better mortgage deals at lower LTVs, either at the point of purchase or when it comes to remortgaging at a later date.

“We are yet to see the extent that Stamp Duty savings are mirrored in higher asking prices, but after a period where credit conditions were squeezed by the new mortgage rules, this fairer tax regime has certainly fuelled buyer optimism about their purchase prospects for 2015."

Buyers in London and the South East profited from the progressive Stamp Duty system, saving nearly £4,600 and £3,900 respectively

Murphy added: “The mortgage market has come through a potentially turbulent year intact with good growth prospects for 2015.

“However, the shift in lending criteria has had a noticeable effect on the shape of the market, particularly at the margins where affordability is most stretched.

“The changes mean the market can grow on a surer footing, and we now have a more sensible approach to Stamp Duty in place.

“However, there are still regional pressures and we mustn’t forget the vital support needed by less affluent buyers.

“Many can still reasonably afford to support a loan even if they have a smaller deposit, so it is encouraging to see a steady stream of new products appearing since the turn of the year.

“It’s likely that we’ll see a further adjustment in 2015 as lenders get more comfortable operating under the MMR and continue offering prudent loans to a broad range of consumers.”