If you’re saving for your first home, you’ve probably seen the magic number: 5% deposit. But with the average deposit for first time buyers in the UK now climbing well into five figures, not to mention even steeper in London, is that really enough to get the keys in your hand?
In this article, we’re going to break down what lenders actually expect, what first-time buyers are putting down, especially in our city, and how to make your deposit stretch further.
What Are People Really Paying? (Hint: It’s More Than 5%)
The typical first-time buyer in England puts down around £68,154, while in Greater London that jumps to approximately £151,731.
5% vs 10%, 15%… What Do Your Numbers Actually Mean?
- 5% deposit = 95% Loan-to-Value (LTV). Yes, it’s possible, especially with government schemes, but it often comes with tougher scrutiny and a higher interest
- 10% deposit (90% LTV) opens the door to better rates and broader lender choice.
- 15–20% deposit (80–85% LTV or less) could mean significantly more competitive interest rates and smoother affordability checks.
You should bear this in mind: increasing your deposit doesn’t just make your monthly costs lower, it shows lenders you’re more stable, and that really counts!
What Affects How Much Deposit You’ll Need?
It’s not just about percentages. A few key things shape how much deposit you’ll actually need:
- Location: A 5% deposit in Liverpool, where the average property price is around £174,000, comes out to roughly £8,700. In East London? It could be closer to £25,000.
- Credit score: Stronger credit can make low-deposit borrowing more feasible. If yours needs work, you might need to save more.
- Employment type: Contractors or freelancers may need to show a larger deposit to balance perceived risk.
- Property type: New builds, flats above shops, and shared ownership properties may come with their own requirements.
Your personal situation matters. That’s why getting tailored guidance, rather than relying on averages, makes such a big difference.
What Lenders and Government Schemes Mean for You
Some lenders still allow a 5% deposit under the Mortgage Guarantee Scheme, which has been announced as a permanent 95% mortgage guarantee scheme by Chancellor Rachel Reeves, aimed at boosting access for first-time buyers like you.
That said, even with these schemes, many lenders do still prefer a deposit of 10% or more to offer better terms. In 2025, some lenders will have a bit more flexibility when it comes to income limits, which could open up more options, but they’ll still check that repayments are affordable for you. London’s high prices can still push deposit requirements into the tens of thousands, even at 5% LTV.
Deposit Examples
Here’s how deposit percentage translates into real numbers, choose your price range:
| Property Price | 5% Deposit | 10% Deposit | 20% Deposit |
| £300,000 | £15,000 | £30,000 | £60,000 |
| £500,000 | £25,000 | £50,000 | £100,000 |
So, for a typical London flat at £500K, even a 5% deposit is £25K, and a 10% deposit is £50K, which is still far below the average London deposit of £125–150K.
Top Tips to Boost Your Deposit Faster
We’ve rounded up a couple of our best top tips to get that deposit pot growing a little more.
Number 1: Use a Lifetime ISA (LISA). You can save up to £4,000 yearly, plus get a 25% bonus from the government. Youll need to remember that there is a £450k property cap for London purchases.
Number 2: Put together a realistic savings plan by using apps to budget, track outgoings and set yourself some saving goals. This will help streamline your spends and cut out any unnecessary bank drainers.
Number 3: The Bank of Mum and Dad. If youre lucky enough to have a family able to help, use this to your advantage. It doesn’t have to be a gift, it can actually be structured as a loan or a formal agreement.
Finally, Number 4: Increase your income. We know, sounds pretty obvious. But there is often untapped potential. You could be due a raise, so make sure to bring this up at work. Or look at freelancing or any side gigs, every little really does help!
These tips arent designed to blow a hole right through your bank statement. But they will help to gradually build up that deposit pot over time.
The Final Word: What’s Smart for You?
Here’s how to think about your deposit goals, with realism and reassurance:
- 5%? It’s an entry point, especially with the permanent 95% mortgage guarantee. It might limit your lender options and mean slightly higher rates, but it gets your foot in the door.
- 10%? A solid middle ground. More reasonable rates, smoother approval, and wider lender access.
- 20%? If it’s possible, you’ll get standout mortgage offers and the most financial comfort later, but we know in London that saving that much can feel like years away.
Next steps:
- Run your numbers using a mortgage calculator.
- Talk to a mortgage broker; you don’t have to go it alone. They can help you understand what you actually qualify for.
- Explore tools like Lifetime ISAs (LISA) for bonus boosts, though keep an eye on scheme caps if you’re eyeing London prices.
In Summary
The average deposit for first time buyer in the UK is around £60–70K, but in London, it’s closer to £125–150K. You can start with 5%, but 10% opens better doors, and 20% puts you in the strongest position.
Government support is improving, with the permanent 95% mortgage guarantee and other options, you’re not walking this alone.
Hang in there. It’s a steep climb, but you’re already making smart moves by knowing the real numbers.
Need help mapping out your deposit strategy?
Get in touch! We have excellent, top rated advisers ready and waiting to help you out.
