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How to Save for a House as a First-Time Buyer in the UK (2026)

11 min read · Updated March 2026

Buying your first home in the UK feels further away than ever — average house prices nationally sit around £285,000, and London buyers face a £520,000+ average. But with the right savings strategy, government bonuses, and clear targets, it's achievable. Here's exactly how to approach it.

1. How Much Deposit Do You Need?

Lenders express deposits as a percentage of the property price. The minimum is typically 5%, but 10% gives you significantly better mortgage rates — and 15-20% is ideal. The difference in monthly repayments between a 5% and 10% deposit on a £250,000 mortgage can be £100+/month due to lower interest rates at higher LTV.

Don't forget additional costs beyond the deposit: Stamp Duty Land Tax (SDLT — first-time buyers pay 0% up to £425,000 until March 2025, reverting to £300,000 threshold after), solicitor fees (~£1,500–£2,500), survey costs (~£500–£1,500), and moving costs.

2. The Lifetime ISA — Your Most Powerful Tool

The Lifetime ISA (LISA) is one of the best savings tools available to UK first-time buyers. The government adds a 25% bonus on everything you save — up to £4,000/year in contributions, meaning a maximum bonus of £1,000/year.

If you save £4,000/year for 5 years, you'll accumulate £25,000 in contributions + £5,000 in government bonuses = £30,000 before interest. That's a significant chunk of most deposits outside London.

3. Other Government Schemes

• Shared Ownership — buy a 10–75% share of a home, pay rent on the rest. Lower upfront deposit needed. You can buy more shares ("staircasing") over time.
• First Homes scheme — eligible first-time buyers can buy new-build homes at 30–50% discount from market value in England. Subject to local authority criteria.
• Mortgage Guarantee scheme — government guarantees part of the mortgage, enabling 5% deposit mortgages with major lenders. Extended to 2025.
• 5% deposit mortgages — even without government schemes, several lenders now offer 95% LTV mortgages for credit-worthy buyers.

4. How Long Will It Take?

Using a LISA saving £4,000/year (plus £1,000 bonus), here's how long it takes to reach different deposit targets:

5. Tips to Save for a Deposit Faster

• Open a Lifetime ISA today if you're under 40 — the bonus accrues annually and you can't backfill past years
• Set up a dedicated savings account labelled "House Deposit" — mental accounting matters
• Automate your savings on payday before you can spend the money
• Track your rent vs mortgage comparison — in many UK cities, monthly mortgage repayments on a starter home are lower than equivalent rent
• Consider moving to a cheaper area temporarily to accelerate savings
• Look at buying with a partner — two incomes can dramatically compress the timeline