How to save for a house deposit… in this economy?!

Which buying schemes can help you save for a deposit?

For many individuals, saving for a house deposit is a huge challenge. Combined with the increasing cost of living in the UK, rising inflation and slowing wage growth, the prospect of saving enough money to buy a home can seem ever more elusive.

Data collated by Forbes in November 2024 found that the average savings of 18-24 year olds in the UK were £3,636 and £3,748 for 25-34 year olds. Collectively, those aged 55 and under had savings under £10,000, significantly less than the median deposit value of £41,750 for first time buyers as of July 2024.

Additionally, with Stamp Duty Land Tax changes for first time buyers coming into effect in April 2025, the ancillary costs of purchasing a home are set to increase further.

So, how can you save for a home in this economy? Thankfully, there are ways, including home-buying schemes requiring a smaller deposit, making it more accessible to take that initial step on the path to homeownership.

How much deposit do I need to buy a home?

The amount you need to save for a deposit depends on the price of the home you wish to buy. On average, mortgage lenders expect a deposit between 10% and 20% of the property’s market value.

However, with Shared Ownership, the deposit needed can be much lower than the average amount, as you’ll pay a deposit between 5% and 10% of the share you are purchasing. For example, if you were to purchase a 25% share of a home with a market value of £300,000, your share value would be £75,000. If a 5% deposit was required, you would need to put down a deposit of £3,750. While still a significant sum, it can be a more achievable target to save for compared to the average deposit needed to purchase a property on the open market.

Are there any deposit schemes available?

Deposit Unlock is a scheme developed by the Home Builders Federation, the official body representing housing developers, and reinsurance firm Gallagher Re. The scheme allows eligible buyers to purchase a new-build home with a 5% deposit.

Elsewhere, savings accounts like the Lifetime ISA can help you build enough savings for a deposit. If you’re over 18 and under 40, this account can be used to buy your first home, and you can put in up to £4,000 each year until you’re 50. On top of that, the government will add a 25% bonus to your savings, up to a maximum of £1,000 per year, boosting your balance to help you achieve your target deposit amount.

The best ways to save for a house deposit

For feasible advice concerning the best ways to save a house deposit, we recommend checking out these savvy tips from young people who’ve bought a home. With a clear and manageable financial plan, alongside applying for schemes and initiatives you may be eligible for such as Shared Ownership, it’s possible to achieve your dream of owning a home.

At Share to Buy, we make your choice easier with a selection of new-build homes across England, available through alternative homeownership schemes such as Shared Ownership. Get your home-buying journey underway using our property portal.