How To: Save for a House Deposit

How To: Save House Deposit

Saving up for a deposit can be a daunting task, but if you take the right steps it could be a lot easier than you’d think.

Building up a deposit is one of the biggest hurdles facing anyone trying to get on to the property ladder, but the key is rather simple: start saving as much as you can, as soon as you can.

More than half of the first-time buyers in the 2015 Which? National property survey said that they’d had a deposit of more than 10% when buying their first home, and the average first-time buyer deposit was 17%.

Here are our recommendations for saving towards the deposit on a house.


Before beginning the process of saving for a deposit, it’s important to assess how much you need to save on a monthly basis. Setting a budget may not be the fastest way to stack up your cash, but sticking to it is still one of the best ways to identify potential saving options.

Take the time to sit down and work out where your money is going each month. Is there anywhere that you can cut back? Make a list of all the essential payments, and of everything you could sacrifice.

Give up renting

For the majority, saving for a deposit is that much harder because a large chunk of their monthly salary goes on rent. To break this cycle, you’re going to have to make a sacrifice somewhere.

Moving back into a parental home is becoming increasingly common as house prices rise and mortgages become more difficult to secure. While for some this may seem like a step backwards – and may not even be practical for many – if your parents have the space and they’re willing to have you move in for six to 12 months, then you would be throwing money away by not taking them up on the offer.

Use government schemes

For many homebuyers attempting to save for a deposit, securing a mortgage or finding the perfect home at the right price can be a real problem.

To tackle this issue, the government has set up a number of schemes to help you get on the property ladder, such as Help to Buy, Right to Buy, Shared Ownership and others.

Set up a savings account

By setting up a savings account, you can often take advantage of some healthy interest rates, and it can also be a good way to save on a regular basis.

However, accounts can have a number of restrictions, such as limits on the number of yearly withdrawals you can make, an obligation to have a current account with the same bank and charges if you miss a monthly deposit.

If you have saved enough to be looking actively at properties, then you will want your money in an account that you can access quickly should you find the home of your dreams.

The bank of mum and dad

Data from Legal & General reveals that one quarter of all property transactions are funded by the ‘bank of mum and dad’.

The contribution can be provided either as a gift or as a loan that may or may not be secured against the property. This provides many with an opportunity to secure their first home more easily, as many individuals or couples struggle to save the essential amount required for the deposit by themselves, with a minimum being required to secure additional funds from a mortgage lender.