Buying your first home? You'll need £70,000 in the first year as deposit, mortgage and maintenance costs soar

PUBLISHED: 06:32 EST, 3 May 2013 | UPDATED: 08:06 EST, 3 May 2013

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The costs that first-time buyers rack up in the first year of owning their home have risen by almost three-quarters in a decade, hitting an eye-watering £70,538 last year.

The huge sum is made up of home maintenance costs and mortgage repayments, but is driven primarily by deposit requirements that have risen dramatically in the financial crisis as lenders demand buyers lay down a greater share of the purchase price up front.

The Chartered Institute of Housing (CIH) estimates that the average cost of the first year of home ownership in 2012, including a 25 per cent deposit, stamp duty, mortgage repayments and annual maintenance, was £70,538 - a rise of 73 per cent since 2002 when the comparable cost was £40,773.

Struggling: The cost of buying a home in the first year adds up to an average of £70,000 - up 73 per cent in 10 years, according to the Chartered Institute of Housing.

In contrast, the cost of renting a home for 12 months – taking into account a six-week deposit and monthly payments – rose by 29 per cent, from £7,492 to £9,662, in the same 10 year period.

The soaring cost of buying a home coupled with rising renting rates means that an affordable home is out of reach for millions of people, the housing body warned.

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The average household income has risen by just 12 per cent in the past 10 years, according to the Office for National Statistics.

Grainia Long, CIH chief executive, said: ‘Living in an affordable, decent quality home – whether that’s through owning or renting – is becoming a pipe dream for an increasing number of people.

'Our research shows the cost of owning and renting is soaring – while average wages are flatlining – putting their entirely reasonable aspirations ever further out of reach.

'These figures show just how dysfunctional our housing market has become. We share the concerns expressed by MPs last week that the government’s new Help to Buy scheme risks increasing house prices while doing little to boost the number of homes actually being built.

Pipe dream: The cost of buying a house and renting - source: Chartered Institute of Housing.

'What we need to see from the government is direct investment in building new houses, which would help make things more affordable for everyone.'

Home ownership levels have fallen in recent years, especially among younger people, while the number of households renting continues to rise.

In February, the English Housing Survey for 2011 to 2012 by the Department for Communities and Local Government, showed that home ownership levels had fallen to their lowest level since 1987.

It also showed that more households are renting their home privately in England than living in social housing for the first time since the 1960s.