How to Build Your First-Time Buyer Deposit
Learn seven practical, realistic ways to build your first-time buyer deposit, from smart saving habits to government schemes and creative options that make homeownership achievable sooner.
You’re saving, cutting back, and doing everything you can — but your deposit still feels out of reach. If that sounds familiar, you’re not alone. For many first-time buyers, the biggest challenge isn’t finding the right home, it’s building that initial deposit.
The good news? There are more ways than ever to get there. With the right strategy and a bit of planning, your first home can move from ‘one day’ to within reach. Here are seven ways to build your deposit — whether you’re starting from scratch or already halfway there.
1. Set a Clear Target (and Make It Visual)
Before you can build momentum, you need to know your number. Start by working out how much you’ll need for your deposit — usually 5% to 10% of your target property price. If you’re buying a £200,000 home, that means between £10,000 and £20,000.
Then, make it visual. Track your progress using a savings app, chart, or spreadsheet. Seeing the balance grow gives you motivation and helps you stay accountable. It’s also worth setting milestones along the way — like reaching your first £1,000 or £5,000 — to celebrate your progress.
2. Open a Lifetime ISA (LISA)
The Lifetime ISA is one of the best tools available to first-time buyers in the UK. You can save up to £4,000 per year, and the government adds a 25% bonus — up to £1,000 annually. That’s essentially free money towards your deposit.
You can open a LISA if you’re aged 18–39 and use the funds to buy your first home (up to £450,000). The key is consistency - setting up a direct debit each month helps you make the most of the bonus.
3. Automate and Simplify Your Savings
Building a deposit can take time, and discipline is everything. Automating your savings means you’re paying yourself first — before you have a chance to spend it.
Set up a standing order to transfer money to your savings account on payday. Even small, regular amounts add up fast. For example, saving £300 a month becomes £3,600 in a year, and if you use a Lifetime ISA, that becomes £4,500 with the government bonus.
4. Explore Gifted Deposits
Many first-time buyers receive help from family — often called a ‘gifted deposit’. This can make a big difference, particularly when mortgage rates or property prices are high.
If this is an option for you, your lender will need a signed letter confirming that the money is a gift, not a loan. It’s also important that the funds are traceable and cleared before your mortgage application, so planning ahead is key.
5. Adjust Your Outgoings and Lifestyle
It’s not glamorous, but small changes can make a huge difference. Review your monthly spending and identify where you can trim back — even temporarily. Subscriptions, takeaways, or unused memberships often add up to hundreds each year.
Using a budgeting app or spreadsheet helps you see exactly where your money goes. Redirecting those savings straight into your deposit fund keeps you moving towards your goal.
6. Increase Your Income (Even Slightly)
If you’ve already cut back and still feel stuck, the next step is to increase your income — even modestly. A few extra hours at work, freelance projects, or selling unused items online can add thousands to your deposit over time.
Think of it as accelerating your timeline. The sooner you can boost your deposit, the sooner you can access better mortgage rates and reduce your borrowing costs.
7. Combine Schemes and Support
There’s no one-size-fits-all route to building a deposit, so don’t overlook the power of combining schemes. Alongside a Lifetime ISA, explore options like the First Homes Scheme or shared ownership — both designed to make buying more affordable.
If you’re unsure what you qualify for, a mortgage broker can help you explore every route available and find the combination that gets you moving sooner.
Building your first-time buyer deposit isn’t about luck — it’s about strategy. Start small, stay consistent, and use every tool available to you. When you’re ready to take the next step, I can help you understand what lenders look for and how close you are to buying your first home.
Your home may be repossessed if you do not keep up repayments on your mortgage or other loan secured against it.
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Most first-time buyers need between 5% and 10% of the property price. The higher your deposit, the better your mortgage rate is likely to be.
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No, you can only use one per property purchase. However, you can transfer funds from a Help to Buy ISA into a Lifetime ISA.
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Yes. Lenders need proof of where your deposit funds originated to comply with anti-money-laundering checks.
