How much deposit do you need to buy a house?

Let’s be honest, there comes a time when you’re ready for a place of your own. You need your own space - we get it! We also know saving a deposit to buy your first home can be quite a challenge. Whether you’ve already started saving for a house deposit or you’re just thinking about it, it’s helpful to have an idea of how much deposit you’ll need.

Our research on average house deposits for first time buyers in the UK shows taking that first step onto the property ladder could be easier in some regions than others.

Let’s start with the place we like to call home: North East England. It’s great news for first time buyers in North East England, where average first time buyer house deposits are one of the lowest in the UK. To buy your first home in the North East, you’ll need to save an average of £10,694 – that’s in stark contrast to first time buyers in the South East (including London), where the average first time buyer deposit is £78,116! Average UK first time buyer deposits were cheaper only in Scotland, at £9,648.

Take a look at our map below, ‘The Price of the Property Ladder’, to see the average costs of first time buyer deposits around the UK.

 

 

First time buyer average house deposits in the United Kingdom, by region:

Region  Average Deposit

East Anglia - £25,946
East Midlands - £22,004
North - £10,694
North West - £18,412
Scotland - £9,648
South East inc London - £78,116
South West - £21,368
Wales - £14,646
West Midlands - £24,048
Yorkshire and the Humber - £13,794

 

How difficult is it to save money for a house deposit?

For many first time buyers, saving for a deposit is believed to be the toughest part of the house buying process. According to research*, 83% of first time buyers in the UK said that saving for a deposit to buy a home was either a ‘somewhat’ or ‘very serious’ problem.

It can feel daunting, but it’s important to remember that help is at hand.

Saving for a house deposit

Of course, if you have received a gift of money towards a first home deposit then saving can be much more manageable, but we understand that many of you will need to start from scratch.

So, how do you begin saving for a deposit? Well, there are lots of options available to help you save for your first home, including two government initiatives that offer savings bonuses to first time buyers. The Lifetime ISA, also known as LISA, allows you to save £4,000 each tax-year, whilst receiving a 25% government bonus on your savings. The money saved in a Lifetime ISA can be used for a house deposit or for retirement.

The second initiative is the Help to Buy ISA, which allows you to deposit £1,200 then save up to £200 a month, topping up your savings with a bonus from the government. (Maximum bonus of £3,000). The Help to Buy ISA won’t be available to new savers after 30th November 2019 and your bonus must be claimed by 1st December 2030.

Great, now you just need to start saving - easier said than done, we know! Try giving yourself a manageable saving goal each month, putting it away as soon as you’ve been paid to avoid the temptation to spend it. It’s also worth considering what you’re spending your money on and looking at how you could save more. Avoiding the daily coffee, bringing your lunch to work or resisting a takeaway on a Friday night are just a few ways you can save.

We’d like to wish you the very best of luck with saving for your first home, and when you do begin the search for the perfect place to buy, don’t forget to take our free House Viewing Checklist along with you to ensure you have everything covered.

Then, take a look at our guide ‘How Do You Make an Offer on a House?’ which explains how to decide the amount you should offer, and what to do when your offer is finally accepted.

If you have any questions, we’re here to help! Call us on the number below.

* YouGov; HomeOwners Alliance via Statista, March 2017

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