How much is a first-time buyer house deposit?

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By Beehive Money

5 mortgages Beehive

Beehive Money is part of The Nottingham, a building society over 170 years old – collectively we know a thing or two about saving money and helping our members buy houses. We know how much first-time buyers want to get into their own homes and we’re here to help that process go as smoothly as possible. With our Lifetime ISA and handy articles, Beehive can guide you through the whole homebuying journey.

We know that saving for a deposit can be one of the hardest bits, especially as house prices usually increase year-on-year. The average annual price change of a property in England was 8.9% across the country. Taking these ever increasing numbers into account, the Government launched its Mortgage Guarantee Scheme in April this year with the aim of increasing the number of 95% mortgages available for first-time buyers and people looking to move up the ladder. Basically meaning first-time buyers are able to get into their homes sooner if they can save their 5% deposits. Data from Moneyfacts shows over 200 95% mortgages are now available in late 2021 compared to just 34 in March this year.

How much deposit do I need?

The Nottingham analysed some data based on average house and flat prices in the UK’s top 20 cities, and they’ve found out how much a 5% deposit would be in each area - the lowest amount of deposit you can have as a first-time buyer. On average across the UK, a 5% deposit for a house is just over £10,600. Flats or maisonettes can be slightly more affordable – analysis of Land Registry house prices found that the average across the top 20 cities is £7,605.  The most affordable cities are Hull where the average 5% deposit across all properties is £6,066 and Preston where the 5% deposit for flats or maisonettes is £3,820. As expected, the most expensive city is London where a 5% deposit for all property types is over £25,000 and still more than £21,000 for flats or maisonettes. If you’re looking to buy in other cities like Birmingham, Bristol, Leicester, Edinburgh, Leeds, Cardiff, Manchester, Coventry and Reading you’ll still need a five-figure deposit.

The table below shows how the deposits break down across the UK’s top 20 cities by population with the highest first.

City by population Average property price 5% deposit needed Average price for flats/maisonettes 5% deposit needed
 London  £510,299  £25,514  £430,707  £21,535
 Birmingham  £208,241  £10,412  £145,778  £7,289
 Liverpool  £163,580  £8,179  £127,011  £6,350
 Nottingham  £166,153  £8,307  £122,927  £6,146
 Sheffield  £186,980  £9,349  £121,592  £6.079
 Bristol  £307,765  £15,388  £238,888  £11,944
 Glasgow  £152,434  £7,621  £129,366  £6,468
 Leicester  £206,297  £10,314  £143,066  £7,153
 Edinburgh  £302,936  £15,146 £231,913  £11,595
 Leeds  £212,943  £10,647  £144,046 £7,202 
 Cardiff  £235,054  £11,752  £156,301  £7,815
 Manchester  £206,574  £10,328  £177,832  £8.891
 Stoke  £126,333  £6,316  £81,223  £4,061
 Coventry  £202,993  £10,149  £125,430  £6,271
 Sunderland  £133,359  £6,668  £83,760  £4,188
 Reading  £296,261  £14,814  £211,572  £10,578
 Hull  £121,335  £6,066  £83,455  £4,172
 Preston  £135,891  £6,794  £76,400  £3,820
 Newport £198,141   £9,907  £108,735  £5,436
 Swansea  £169,168  £8,458  £102,274  £5,133
 Average deposit    £10,606    £7,605

How to save your house deposit

There are a few different ways to get you towards your house purchase goal sooner rather than later. We even have a full guide on how to save your deposit, but here’s a few pointers to get you on the right track.

1. Set a deposit goal

Hopefully some of the information in this article could help you work out your budget, chat to some estate agents in your local area and have a search for some properties that you like the look of.

2. Start saving!

The sooner you start, the closer you are. It’s as simple as that, if you’ve not started saving just yet and you’re keen to get on the property ladder. With Beehive Money all you need are a few minutes and £1 to fund your account and you’ll be on your way.

3. Get a Government bonus

If you’re 18-39 and looking to save for your first home (or set aside money for retirement with savings accessible from age 60) a Lifetime ISA could be ideal if you're looking to buy a home under £450,000. This tax-free savings account is boosted by a 25% Government bonus, which means you could earn up to £1,000 a year in bonuses alone until you turn 50 – plus you’ll earn interest on top. There'll be a withdrawal charge if you withdraw from your Lifetime ISA for anything other than your first home or when you're 60 for retirement.

There's lots of information, tips and research all to do with buying your first home, you may even be able to get a 5% mortgage for your first home depending on your circumstances. Take a read of our savings guides, swot up on your mortgage knowledge and get excited about your homebuying journey. Remember, our Customer Advocates are here to answer any of your Lifetime ISA questions and you can chat to BeeBot about general product queries too. 

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