Saving for a house deposit is one of the biggest financial challenges facing UK homebuyers in 2025. With average house prices still high despite recent cooling, understanding how much you need to save—and the best strategies to reach your goal—is essential for getting onto the property ladder.
This guide explains how deposit size affects mortgage options and rates, government schemes available to first-time buyers, and practical strategies to build your deposit faster.
Deposit by House Price
| House Price | 5% Deposit | 10% Deposit | 15% Deposit | 20% Deposit |
|---|---|---|---|---|
| £150,000 | £7,500 | £15,000 | £22,500 | £30,000 |
| £200,000 | £10,000 | £20,000 | £30,000 | £40,000 |
| £250,000 | £12,500 | £25,000 | £37,500 | £50,000 |
| £300,000 | £15,000 | £30,000 | £45,000 | £60,000 |
| £400,000 | £20,000 | £40,000 | £60,000 | £80,000 |
| £500,000 | £25,000 | £50,000 | £75,000 | £100,000 |
Impact on Mortgage Rates
| LTV (Deposit) | Typical Rate | Monthly (£200k) |
|---|---|---|
| 95% (5%) | 5.5% | £1,076 |
| 90% (10%) | 4.8% | £942 |
| 85% (15%) | 4.5% | £862 |
| 75% (25%) | 4.2% | £735 |
| 60% (40%) | 4.0% | £573 |
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Monthly Savings to Reach Target
| Target | 2 years | 3 years | 5 years |
|---|---|---|---|
| £15,000 | £625 | £417 | £250 |
| £25,000 | £1,042 | £695 | £417 |
| £35,000 | £1,458 | £972 | £583 |
| £50,000 | £2,083 | £1,389 | £833 |
Help Available
- Lifetime ISA: Government adds 25% bonus (max £1,000/year)
- First Homes: 30-50% discount for first-time buyers
- Shared Ownership: Buy 25-75% and rent the rest
- Family deposits: Parents can provide gift or loan
Lifetime ISA Explained
The Lifetime ISA is one of the most powerful tools for first-time buyers:
- Annual limit: £4,000 per tax year
- Government bonus: 25% (£1,000 max per year)
- Property limit: Must cost £450,000 or less
- Age requirement: Open between 18-39, use before 60
- Withdrawal penalty: 25% charge if used for non-qualifying purpose
Your contributions: £4,000 × 4 = £16,000
Government bonuses: £1,000 × 4 = £4,000
Interest (at 4%): ~£1,200
Total after 4 years: ~£21,200
Regional Deposit Requirements 2025
| Region | Avg House Price | 10% Deposit |
|---|---|---|
| London | £500,000 | £50,000 |
| South East | £370,000 | £37,000 |
| South West | £320,000 | £32,000 |
| East of England | £330,000 | £33,000 |
| West Midlands | £240,000 | £24,000 |
| North West | £210,000 | £21,000 |
| Yorkshire | £200,000 | £20,000 |
| North East | £160,000 | £16,000 |
| Scotland | £185,000 | £18,500 |
| Wales | £205,000 | £20,500 |
Tips to Save Faster
- Automate savings: Set up standing order on payday before you spend
- Reduce rent: Consider moving back with parents if possible (saves £800+ monthly)
- Cut subscriptions: Review and cancel unused services
- Side income: Freelance work, selling unused items
- Save windfalls: Put bonuses, tax refunds directly into deposit fund
- Use cash ISAs: Earn tax-free interest on savings
First-Time Buyer Stamp Duty Relief
First-time buyers benefit from stamp duty relief in England and Northern Ireland:
- £0-£425,000: 0% stamp duty
- £425,001-£625,000: 5% on portion above £425,000
- Over £625,000: Standard rates apply (no relief)
Scotland uses LBTT with different thresholds, and Wales uses LTT.
Average UK House Deposits by Region
The amount you need for a house deposit varies dramatically depending on where in the UK you plan to buy. As of 2025, average house prices differ by hundreds of thousands of pounds between regions, meaning your deposit target will be shaped heavily by location.
In London, where the average house price sits around £535,000, a 10% deposit would require approximately £53,500. By contrast, in the North East of England, where average prices hover near £165,000, a 10% deposit comes to roughly £16,500. The North West, Yorkshire and the Humber, and Wales all offer more affordable entry points, with average deposits for first-time buyers typically falling between £15,000 and £25,000 at the 10% level.
Scotland presents a slightly different picture, with average house prices around £195,000 and its own set of legal processes including the Home Report requirement. Northern Ireland remains one of the most affordable UK regions for property, with average prices around £175,000.
Understanding Deposit Percentages: 5% vs 10% vs 20%
The size of your deposit directly affects the mortgage deals available to you and the total cost of your home over time. Here is how the main deposit tiers compare:
5% deposit: The minimum accepted by most UK lenders. While this gets you onto the property ladder sooner, you will face higher interest rates and your monthly repayments will be larger. With a 95% loan-to-value (LTV) mortgage, you also carry more risk if house prices fall. The government-backed mortgage guarantee scheme has helped lenders offer 95% LTV products with greater confidence.
10% deposit: This is the most common target for first-time buyers. At 90% LTV, you unlock noticeably better interest rates compared to 95% LTV deals. For a £250,000 property, a 10% deposit of £25,000 could save you thousands in interest over the mortgage term compared to a 5% deposit.
20% deposit: At 80% LTV, you access some of the most competitive mortgage rates on the market. Lenders view you as lower risk, and your monthly payments will be substantially reduced. However, saving a 20% deposit takes considerably longer, and in rising markets, waiting could mean chasing ever-higher prices.
Government Schemes for First-Time Buyers
The UK government offers several schemes designed to help first-time buyers build their deposits and access the housing market:
Lifetime ISA (LISA): Available to anyone aged 18 to 39, the LISA allows you to save up to £4,000 per tax year towards your first home. The government adds a 25% bonus on top, meaning you receive up to £1,000 in free money each year. The property must cost £450,000 or less, and you must have held the LISA for at least 12 months before using it. Over several years of saving, the LISA bonus can add thousands to your deposit pot.
Help to Buy ISA: Although closed to new applicants since November 2019, existing holders can continue saving until November 2029. The government adds a 25% bonus (up to £3,000) when the funds are used for a property purchase. If you already hold one of these accounts, it remains a valuable part of your deposit strategy.
First Homes scheme: This programme offers newly built homes to first-time buyers at a discount of at least 30% compared to market value. Eligibility criteria include a household income cap of £80,000 (£90,000 in London) and the discounted price must be no more than £250,000 (£420,000 in London).
Shared Ownership: Managed through housing associations, Shared Ownership lets you buy a share of a property (between 25% and 75%) and pay rent on the remainder. This significantly reduces the deposit you need, as you only put down a deposit on the share you are purchasing.
Frequently Asked Questions
How long does it take to save a house deposit in the UK?
Based on average UK earnings of approximately £34,000 per year and saving 10-15% of take-home pay, it typically takes a first-time buyer between 5 and 10 years to save a 10% deposit outside of London. In London and the South East, this timeline can extend to 12-15 years or more without family assistance. Using a Lifetime ISA with the government bonus can reduce this timeline by roughly one to two years.
Can I buy a house with no deposit in the UK?
True zero-deposit mortgages are extremely rare in the UK following the 2008 financial crisis. However, some lenders offer family-assisted mortgages where a relative places savings as security or allows a charge on their own property. The most common minimum deposit remains 5% of the property value. Some local authority schemes may also offer assistance in specific areas.
Does stamp duty affect how much deposit I need?
Stamp duty (or SDLT in England and Northern Ireland) is a separate cost from your deposit and must be budgeted for on top of it. First-time buyers in England and Northern Ireland pay no stamp duty on properties up to £300,000, and a reduced rate on properties up to £500,000. Scotland uses Land and Buildings Transaction Tax (LBTT) with different thresholds, while Wales applies Land Transaction Tax (LTT). Always factor these additional costs into your total savings target alongside solicitor fees, survey costs, and removal expenses.
Should I wait to save a larger deposit or buy sooner with less?
This depends on your local market conditions, interest rates, and personal circumstances. Buying sooner with a smaller deposit means paying more in interest but starting to build equity immediately. Waiting to save more gives you better rates but risks house prices rising faster than your savings. In areas with rapidly increasing prices, buying sooner with a 5-10% deposit may work out cheaper in the long run than waiting to accumulate 20%.
Saving for a House Deposit in the UK: Key Facts
The average first-time buyer deposit in the United Kingdom stands at approximately 53,000 pounds according to UK Finance data, representing around 20 percent of the average purchase price. However, this figure varies enormously by region. In London, where average house prices exceed 500,000 pounds, the typical first-time buyer deposit is over 100,000 pounds, whereas in parts of the North East and North West of England, deposits of 15,000 to 25,000 pounds are common for starter homes.
The UK government offers several schemes to help first-time buyers accumulate a deposit and access the housing market. The Lifetime ISA (LISA), launched in 2017, allows individuals aged 18 to 39 to save up to 4,000 pounds per year toward their first home, with the government adding a 25 percent bonus (up to 1,000 pounds per year). The savings and bonus can be used toward a property costing up to 450,000 pounds. Withdrawing LISA funds for any purpose other than buying a first home or retirement incurs a 25 percent penalty on the total amount withdrawn, which effectively means losing the bonus and a portion of your own savings.
Mortgage lenders in the UK typically require a minimum deposit of 5 percent of the property purchase price, though products at 95 percent loan-to-value (LTV) carry higher interest rates. Each 5 percent increase in deposit size generally unlocks better mortgage rates, with the most competitive deals available at 60 percent LTV or lower. The interest rate difference between a 95 percent LTV and a 75 percent LTV mortgage can be 1 to 2 percentage points, which on a 200,000-pound mortgage translates to 2,000 to 4,000 pounds per year in additional interest payments.
Help to Buy equity loans, which helped over 350,000 households purchase new-build homes, closed to new applications in October 2022. The scheme's closure, combined with rising house prices and interest rates, has made saving for a deposit more challenging for first-time buyers entering the market from 2023 onwards.
Practical Deposit Saving Tips for UK Buyers
- Maximise your Lifetime ISA: If you are eligible, contribute the full 4,000 pounds each tax year to your LISA to receive the maximum 1,000-pound government bonus. Over four years, this adds 4,000 pounds of free money to your deposit fund.
- Consider shared ownership: Shared ownership schemes, available through housing associations across England, allow you to buy a share of a property (typically 25 to 75 percent) and pay rent on the remainder. The deposit requirement is only on your share, making it possible to buy with as little as 5,000 to 10,000 pounds.
- Research First Homes scheme: The First Homes scheme offers newly built homes to first-time buyers in England at a discount of at least 30 percent below market value. The discount is passed on to future buyers, keeping the homes affordable in perpetuity.
- Set up automatic savings transfers: Transfer a fixed amount to a dedicated savings account on payday before you have a chance to spend it. Even 200 to 300 pounds per month adds up to over 10,000 pounds in three years, plus interest and any government bonuses.
House Deposit Questions
Can I use a Lifetime ISA and a Help to Buy ISA together for my deposit?
What additional costs should I budget for beyond the deposit?
Is it better to save a bigger deposit or buy sooner with a smaller one?
Oliver Williams, CeMAP
Independent Mortgage Adviser
Oliver is a CeMAP-qualified independent mortgage adviser with 15+ years of experience helping first-time buyers and property investors navigate the UK housing market. He is registered with the FCA.