The deposit: how anyone actually gets one
The deposit is the wall. Everything else about buying a house is arithmetic you can learn in an afternoon; the deposit is tens of thousands of pounds you do not have. This page is about where that money really comes from, because the official story is saving hard, and the numbers say something else entirely.
A typical UK first time buyer needs about £23,000 for a 10% deposit, and saving 10% of average take home pay would take nearly six years. In 2026, 53% of first time buyers got money from family. The deposit is not only a savings target. It is also a test of who your parents are.
The size of the wall
Nationwide's affordability report puts a 10% deposit on a typical first time buyer property at about £23,000. Saving 10% of average take home pay, roughly £320 a month, that takes nearly six years. In London it is about nine years. In the north of England about four.
Six years of never missing a month, while renting, while rents rise 3.7% a year, while the price of the thing you are saving for also moves. That is the actual shape of the problem, and it is why the phrase "just save harder" does so little work.
Deposits actually paid run higher than 10%. UK Finance figures put the average first time buyer deposit in England at £63,855, about 22% of the price, and in Greater London at £137,025, about 28%. The average across the UK for 2024 was £61,090, around 20%.
Savills, working from the regulated mortgage survey and Bank of England data, found that in 2026 first time buyers received £11 billion of financial support from their families, and that 53% of all first time buyers had some family help. Not a third. Not a minority. More than half.
Broken down: 32% were given money outright, 16% borrowed from family, and 14% used inherited wealth.
Sit with that for a moment. If the majority of people who cross the line are carried over some of it, then the deposit is not purely a measure of how carefully you saved. It is partly a measure of what your family had. Nobody says this out loud in a mortgage advert, and it changes what it means when somebody your age is told they are simply not trying hard enough.
This is not an argument for giving up, and it is not an accusation against anyone who got help. It is a fact worth knowing before you decide the reason you are not on the ladder is you.
The 5% route, and what it costs
You do not always need 20%. The mortgage guarantee scheme was made permanent in July 2025, which keeps 95% mortgages available: a 5% deposit, the government standing behind part of the lender's risk.
The catch is not hidden, it is just rarely spelt out. A smaller deposit means a bigger loan and a higher rate, and both work in the same direction.
Neither column is the right answer. The left one needs £33,900 you may not have for six years, during which you are paying rent. The right one gets you in now and costs about £65,900 more across the term. That is the trade, stated plainly, and it is a trade rather than a trick.
The Lifetime ISA, and its two catches
The Lifetime ISA is the one piece of the system built specifically for this. You can open one between 18 and 39, put in up to £4,000 a year, and the government adds 25%, up to £1,000 a year. Four years of full payments is £16,000 of yours plus £4,000 free.
It comes with two conditions that catch people out, and both are worth knowing before you open one rather than after.
The first is the price cap. The property must cost £450,000 or less. That number was set in April 2017 and has not moved since, while the average London house price has. If it had been raised in line with prices it would be around £575,000 today. It also does not line up with the stamp duty first time buyer threshold of £500,000, so there is a band of homes where the tax system calls you a first time buyer and the savings system does not.
The second is the exit charge. Take the money out for anything other than a first home under £450,000, or turning 60, or terminal illness, and there is a 25% withdrawal charge. It sounds like it just removes the bonus. It does not. Here is the government's own worked example: you save £800, the bonus adds £200, you have £1,000. Withdraw early and the charge is 25% of £1,000, which is £250. You get £750 back. You put in £800 and got £750. The bonus is gone and £50 of your own money went with it.
You also have to hold the account for at least 12 months before buying, so opening one early costs nothing and starts the clock.
What this does and does not prove
It does not prove that saving is pointless, and it certainly does not prove that a Lifetime ISA is good or bad. It proves that the deposit is a much bigger obstacle than a monthly payment is, that the majority of people who clear it in 2026 had help, and that every route around it, a smaller deposit, a shared ownership share, a government bonus with a frozen cap, carries a cost that is written down somewhere and rarely read aloud.
What it leaves open is what you do about it. That depends on your income, your family, where you want to live and whether you want to buy at all, which is a question the previous page in this chip takes seriously.
- Whether the price cap fits your area. If the flats where you want to live cost more than £450,000, a Lifetime ISA cannot buy them. Check local prices before you lock money in.
- The exit charge, in pounds not percentages. Work out what you would actually get back if you needed the money at 25 for something else. The government publishes the worked example; do it with your own number.
- What rate a 5% deposit actually gets you today. Not the headline rate, the one for your loan to value. The gap between 75% and 95% is the real price of a smaller deposit.
- The fees on top of the deposit. Legal work, survey, arrangement fee, removals. A few thousand pounds that no deposit calculator includes.
- Whether shared ownership is what it sounds like. You buy 10% to 75%, pay rent on the rest, and it is usually leasehold with a service charge. It is a real route, and it is not the same as owning.
- Whether First Homes exists where you are. At least 30% off, England only, income capped at £80,000 and £90,000 in London, and stock is described even by its supporters as very limited.
- That Help to Buy is gone. The equity loan scheme closed to new applications in October 2022 and finished on 31 March 2023. Anyone still quoting it is working from old notes.
This is a list of things to find out, not a list of things to do. What you do with the answers is yours.
- The deposit and the six years. Nationwide housing affordability report, January 2026: a 10% deposit on a typical first time buyer home is about £23,000; at 10% of average net pay, about £320 a month, that is nearly six years, about nine in London and about four in the north.
- The family money. Savills: first time buyers receive £11.0 billion in support from families, June 2026: 53% of first time buyers had family help, made up of 32% outright gifts, 16% family loans and 14% inherited wealth.
- The Lifetime ISA rules. GOV.UK Lifetime ISA: open between 18 and 39, £4,000 a year, 25% bonus up to £1,000 a year, no payments after 50. Withdrawing money: £450,000 property cap, 12 months from first payment, 25% charge otherwise, and the official £800 in, £750 out example.
- The frozen cap. The £450,000 limit has been unchanged since the Lifetime ISA launched in April 2017. Compare it with the ONS house price figures for the same period and draw your own conclusion.
- The schemes that are open. HomeOwners Alliance, first time buyer schemes 2026: mortgage guarantee scheme permanent from July 2025, shared ownership, First Homes with its income caps, and Help to Buy equity loan closed on 31 March 2023.
- Our arithmetic. £226,000 property. 20% deposit £45,200, loan £180,800, 300 months at 5.24% gives £1,082.37 a month and £143,912 total interest. 5% deposit £11,300, loan £214,700, 300 months at 6.24% gives £1,414.98 a month and £209,794 total interest. Reproduce either on any calculator.
Questions people ask
How much deposit do I need to buy a house in the UK?
The minimum is usually 5%, which on a typical first time buyer home is around £11,000, and the mortgage guarantee scheme has been permanent since July 2025 to keep those deals available. What people actually put down is far more: UK Finance figures show an average English first time buyer deposit of £63,855, about 22% of the price. A smaller deposit means a larger loan at a higher rate.
How long does it take to save a deposit?
Nationwide's January 2026 report puts a 10% deposit at about £23,000 and estimates nearly six years of saving 10% of average take home pay. That rises to roughly nine years in London and falls to about four in the north of England. Those years are usually spent paying rent at the same time.
How many first time buyers get help from their parents?
53% in 2026, according to Savills, totalling £11 billion: 32% outright gifts, 16% loans from family and 14% inherited wealth. It is worth knowing that the majority route onto the ladder involves family money before you conclude that saving is simply a matter of discipline.
Is a Lifetime ISA worth it?
That depends on facts about you that this site cannot know. What it can tell you is the shape of the deal: 25% added to up to £4,000 a year, a £450,000 property cap frozen since April 2017, a 12 month wait before you can buy, and a 25% exit charge that takes back the bonus plus a slice of your own money if you use it for anything else.
What happens if I take money out of a Lifetime ISA early?
A 25% withdrawal charge applies to the whole amount, not just the bonus. The government's own example: save £800, receive a £200 bonus, hold £1,000, withdraw early and the charge is £250, leaving £750. You paid in £800 and got £750 back.
Does Help to Buy still exist?
The equity loan version does not. It closed to new applications on 31 October 2022 and ended on 31 March 2023. What remains is the mortgage guarantee scheme supporting 95% mortgages, shared ownership, First Homes in England with income caps of £80,000 and £90,000 in London, and the Lifetime ISA.
Read next
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- CreditCredit scores: the number that is not a number
- Rabbit holeCurrency debasement: why saving alone is not enough
Last checked 26 August 2026.