How much do I really need to save for my first home?

According to HM Land Registry, as of December 2023, the average house price in the UK was around £281,913 meaning that to purchase a property of this value you'd need to save £28,191 for a 10% deposit. Of course, the price of a first home will vary depending on where you live, what type of home you want and how much you can borrow.

• Stamp Duty

  Rules vary across the British Isles. In England and Northern Ireland, you don't have to pay Stamp Duty if you are a first-time buyer and the property is valued less than £425,000. Different rules apply in Scotland and Wales.

• Using a mortgage broker

  Not all brokers charge fees, but some could charge up to £500, so it's wise to have a look round before deciding on a broker.

• Home valuation survey

  Lenders carry out their own free survey, but you may want to pay for your own RICS (Royal Institute of Chartered Surveyors) approved survey depending on the age of the property. Your conveyancer/solicitor can help you arrange this.

• Legal costs

  Your legal costs could amount to between £1,000 and £1,500. On top of that, there are also moving costs to consider.

These are just some of the additional costs to consider but there are many others. You can find out more in our article about the costs of buying a house.

Be realistic, be optimistic

Let’s face it, it can be hard to save to buy a property, but not impossible. If you’ve just started saving for your first place, you might already have picked the area or even have your eye on a particular property. It’s good to understand what you want from your first home and save for it. It’s also worth considering the things that might affect your savings between now and the time you’ll be buying such as new cars, holidays, or weddings, especially if you have a few years to go.

House prices may change in the long-term

The house you’re saving for in 2024 probably won’t cost the same in 2034. Even though some house prices have started to fall in recent months, between December 2013 and December 2023, on average house prices rose by almost 60%. So, let's imagine there's a similar rise in the next 10 years from December 2023, then you're looking at an average house price of roughly £455,221. It’s frustrating, but if the price of the place you’ve set your heart on goes up, the amount of the deposit required for a mortgage would be likely to go up too.

Save hard

Let’s not get ahead of ourselves though – remember, it may be hard to make that first step, but not impossible. With a bit of careful planning and a proactive approach to saving, you could do it. Get into good savings habits early on. If you get a pay rise, don’t blow it and be sensible. If you’re aged 18-39 consider putting it away in something like a Lifetime ISA (LISA), which is designed to help first-time buyers save for a deposit or to help save towards your retirement.

The best thing about a LISA is that you get a 25% bonus on every penny you put away, and each year you can save up to your LISA allowance, which is £4,000 for this tax year, up to and including the day before your 50th birthday. It all adds up. Let's just say if you could save £4,000 a year for five years - with the government bonus added you'd have a deposit of £25,000.

However, it’s important to note that any withdrawals from your LISA within 12 months of your first payment in will include a 25% government withdrawal charge, which would mean you'd get back less than you'd paid in. After that, you can withdraw money to buy your first home, but for any other withdrawals before the age of 60, the government withdrawal charge will apply.

Find out more about the LISA withdrawal charges.