First time buyer? Here's how much deposit you'll need

For most first time buyers, the biggest barrier isn’t finding the perfect home, it’s saving the deposit.

Let’s follow Emma, a 29 year old first time buyer from Manchester. She worked out how much she needed to save, built her deposit and finally bought her dream home.

Step 1: Understanding what lenders want

When Emma first started browsing property listings, she quickly realised she needed to understand how deposits work.

Most lenders in England will accept a minimum deposit of 5% of the property value. For Emma’s £200,000 home, that would be £10,000.

However, mortgage brokers often recommend aiming for around 10%, about £20,000 in Emma’s case, to access a wider choice of mortgage deals and better interest rates.

Step 2: Saving for the deposit

This is the toughest but most rewarding part of any homeowner’s journey.

1. Setting a savings goal

Emma decided to save £20,000 over 18 months. That meant putting aside about £1,100 per month when including bonuses and some side income.

To make it less intimidating, she broke it down further:

• £250 per week or
• £36 per day (roughly the cost of a night out or a takeaway).

2. Building a realistic budget

Emma started by tracking her spending using a budgeting app. Within the first month, she realised she was spending nearly £250 a month on food deliveries and coffee.

She made small lifestyle swaps:

• Cooked at home and prepped lunches for work.
• Cancelled unused subscriptions (saving £40/month).
• Moved to a SIM only mobile plan (saving £25/month).
• Shared streaming services with her sister.

In total, she freed up about £400 a month, which she redirected straight into her deposit fund.

3. Using a Lifetime ISA

Emma opened a Lifetime ISA (LISA). A government savings account that gives you a 25% bonus on what you save, up to £4,000 per year.

Here’s how it helped:

• She deposited £4,000 each tax year.
• The government added £1,000 in bonuses annually.
• Over two years, that’s £2,000 in free money toward her deposit.
• This meant Emma only needed to personally save £18,000 to hit her £20,000 goal.

4. Side hustles and extra income

To boost her savings, Emma picked up freelance social media work on weekends. Even earning an extra £300 per month added up to £4,000 over the year.

She also sold old clothes and furniture online, earning another £600.

5. Keeping her money safe and separate

Emma opened a dedicated house fund savings account with a high interest rate and automated her transfers right after payday.

Check out our blog for practical tips on how to boost your deposit.

Step 3: Reaching the goal

After 18 months, Emma had hit her £20,000 target. £18,000 from her own savings and £2,000 from government bonuses.

When she finally transferred that deposit to her solicitor, it felt like all her hard work had paid off.

Step 4: Buying the home

With a 10% deposit ready, Emma’s mortgage application was smooth. She secured a lower interest rate, which saved her about £120 per month compared with a 5% deposit deal.

Within weeks, they accepted her offer on a charming two-bedroom terrace, her very first home.

Lessons for first time buyers

• Aim for 10% if you can. It gives you better mortgage options.
• Break big goals into small targets to stay motivated.
• Use government schemes like the Lifetime ISA to boost your savings.
• Automate your savings and treat them like a monthly bill.
• Don’t be afraid to look for extra income through side work or selling unwanted items.

Listing with properties under £200,000

• Development: Ashlar Village
• Developer: Bellway
• Address: Bilsland Drive, Glasgow, G20


 
 


• Development: Squirrel Fold
• Developer: Gleeson
• Address: Thornton Road, Bradford, West Yorkshire, BD13


 
 


• Development: Artemis View
• Developer: Bovis Homes
• Address: Nash Road, Margate, Kent, CT9


 
 


Check out some of our other helpful resources:

Ways to improve your credit score

What is a mortgage?

What bills do I need to pay when I own a house?

Please note that Emma is a fictional character and this article is provided for general informational purposes only.