First-Time Buyer Deposits – What You Need to Know in 2025!

How to Save for a House Deposit in the UK: First-Time Buyer Deposit Tips for 2025

Are you dreaming of stepping onto the property ladder but not sure where to start? Whether you're fed up with renting or living with family, buying your first home is one of the biggest (and most exciting!) financial steps you’ll ever take. The good news? With the right plan, you can make it happen—even in today’s market. Please read more for first time buyer deposit help!

In this guide, we’ll break down how much you need for a deposit in 2025, the options available for first-time buyers, and actionable tips to help you save faster. Let’s get into it.

💷 How Much Do You Actually Need for a House Deposit in 2025?

Let’s start with the big question: how much money do you need to buy your first home?

As of 2025, the average first-time buyer deposit in the UK is around £61,000. That might sound like a huge number—and for many, it is—but it reflects a deposit of roughly 20% of the property price.

Of course, this figure can vary significantly depending on where you’re buying. For example:

• A one-bedroom flat in London might require a deposit of £80,000 or more.

• Meanwhile, a two-bed house in the North East may only need £20,000 to £30,000 upfront.

  
  

That said, even if you’re not aiming for the average, you’ll still need to come up with at least 5–10% of the property price for most mortgage lenders.

📉 What’s the Minimum Deposit for First-Time Buyers?

Here’s the good news: you don’t need £60,000 saved up to get on the ladder. Many lenders will accept as little as 5% deposit, depending on your credit history and income.

Example:

• Property price: £250,000

• 5% deposit: £12,500

• 95% mortgage: £237,500

  
  

But here’s the catch: the smaller your deposit, the higher your interest rate is likely to be. That’s because lenders take on more risk when you borrow more relative to the property’s value.

The Rule of Thumb:

The bigger your deposit, the better your mortgage deal.

If you can aim for 10–20%, you’re more likely to secure a competitive interest rate, which will save you thousands over the lifetime of your mortgage.

💡 How to Save for a Deposit: 7 Tips That Work

Saving for a house deposit can feel overwhelming, but it doesn’t have to be. The key is to start early, stay consistent, and make smart choices along the way.

Here are some tried-and-tested strategies to help you grow your deposit faster:

1. ✅ Open a Lifetime ISA (LISA)

One of the best tools for first-time buyers is the Lifetime ISA. You can deposit up to £4,000 a year, and the government will top it up with a 25% bonus—that’s £1,000 free cash each year.

Key LISA Benefits:

• Tax-free interest

• Government bonus up to age 50

• Can be used for your first home (up to £450,000 purchase price)

Tip: Open it as early as possible—even if you can only save small amounts. Every bit counts!

2. ✅ Set a Monthly Savings Goal

Saving becomes easier when you treat it like a bill. Set a monthly savings target and transfer it to a separate savings account right after payday.

Use budgeting apps like:

• Monzo

• Plum

• Emma

• Moneybox

These tools can help you stay on track and give you a clear picture of your progress.

3. ✅ Track Every £££

You can’t manage what you don’t measure. Go through your bank statements and track where your money is going.

Common money leaks include:

• Takeaways

• Streaming services you don’t use

• Impulse Amazon orders

• £4 coffees that add up to £100+ a month ☕

Start with a spending audit and eliminate or reduce non-essentials. That doesn’t mean cutting out all fun—just being more intentional.

4. ✅ Automate Your Savings

Set up a standing order to move money into your savings account automatically each month. It’s a simple trick, but it makes saving effortless and helps you stay disciplined.

Psychological bonus: You won’t miss money you never see in your current account.

5. ✅ Use Cashbacks and Vouchers

If you're already spending money on essentials, use tools like:

• TopCashback

• Quidco

• Honey browser extension

These platforms give you cashback for online shopping or apply discount codes automatically. Redirect all savings into your deposit pot.

6. ✅ Consider a Side Hustle

Earning extra income can turbocharge your deposit savings. Side hustles to consider:

• Freelance work (writing, design, tutoring)

• Pet sitting or dog walking

• Selling items online

• Weekend hospitality shifts

Even an extra £200–£500 a month can make a massive difference over a year.

7. ✅ Cut Back on Rent (If You Can)

One of the biggest expenses is rent. If possible, move back in with family or house share temporarily to reduce costs. Yes, it might be tight or inconvenient—but the short-term sacrifice could shave years off your deposit timeline.

👨‍👩‍👧‍👦 What About Family Support?

Don’t be afraid to talk to your family about your homebuying plans. According to recent stats, over 40% of first-time buyers in the UK receive financial support from the “Bank of Mum & Dad”.

The average family gift or loan is around £25,000, and it can make a huge difference in getting you onto the ladder sooner.

Family Can Help In Several Ways:

• Gifting part (or all) of the deposit

• Acting as a mortgage guarantor

• Offering a low- or no-interest loan

• Letting you live rent-free while you save

  
  

Important: Always document any gifts or loans to avoid confusion later on (especially if other siblings are involved).

🧠 Final Thoughts: Make a Plan & Stick to It

Buying your first home might seem daunting in today’s housing market, but it’s more achievable than you think—especially with a clear plan and a bit of discipline.

Here’s Your 3-Step Action Plan:

1. Work out how much you need.Look at the average property prices in your area and calculate your ideal deposit (5–20%).

2. Start saving smart.Open a Lifetime ISA, set monthly goals, cut back on unnecessary spending, and consider earning extra income.

3. Get mortgage ready.Once you’re close to your savings goal, speak to a mortgage adviser to understand your options and get a Decision in Principle (DIP).

   
   

🎯 Your Next Step: Speak to a Mortgage Adviser

When you’re serious about buying, don’t guess—get expert advice. A mortgage broker can help you:

• Understand how much you can borrow

• Find the best mortgage deals for your deposit size

• Get pre-approved (a Decision in Principle)

• Navigate the paperwork with confidence

  
  

Whether you’re just starting your savings journey or you’re ready to view properties, we’re here to help you get mortgage ready the right way.

Ready to Start Your Journey? 🚀

Buying your first home is a big deal—but with the right tools and mindset, it’s within reach. Start saving today, stay focused, and when you’re ready, we’ll be here to guide you every step of the way.

Let’s get you on the property ladder—the smart way. ✅