How Much Deposit Do I Need to Buy a Home?

Typical Deposit Levels in the UK and the North West

Nationally, first-time buyers typically provide around a 20% deposit - approximately £61,090 based on average home prices of £311,034 in 2024. In the North West, the average loan size for first-time homebuyers was £172,088 in early 2025. Applying a 20% deposit gives around £34,400 as a ballpark.

However, borrowing only 80% of a property's value means traditional mortgages are most accessible when aiming for a 20% deposit. Lenders often offer slightly smaller deposits, but interest rates and affordability assessments tighten significantly at higher loan-to-value (LTV) ratios.

Deposit Requirements: 5% to 20% and Beyond

Minimum 5% Deposit
Thanks to the government's Mortgage Guarantee Scheme, which recently ran through to June 2025, many first-time and moving buyers were able to secure 95% loan-to-value (LTV) mortgages with just a 5% deposit. While this national support has ended, some lenders are still offering competitive low-deposit options, especially to creditworthy buyers and key workers.

0% Deposit Mortgages
A handful of lenders have introduced 100% LTV mortgages (no-deposit loans), usually requiring strong financial standing or rental history with the same payment level. However, these come with higher interest rates - typically around 5.9% - and pose a greater risk of negative equity if property values decline.

The North West in Context

The North West remains one of the most accessible property regions in the UK. Average starter home prices hover around £175,000, with the region showing annual price growth of approximately 4.2%.

• 20% deposit: £35,000
• 10% deposit: £17,500
• 5% deposit: £8,750

Time to Save

Based on regional incomes, couples saving 5% of their gross monthly pay (averaging around £39,700 each) can typically build a 10% deposit for a standard North West home in roughly 4–5 years. That timeframe can be shorter with tools like Lifetime ISAs, shared ownership, or financial gifts from family.

Government Assistance and Schemes

Farrell Heyworth advises buyers to explore the following support routes:

• Lifetime ISA: Savers aged 18–39 can receive a 25% government bonus on up to £4,000 per year, adding up to £1,000 annually toward your deposit.
• Shared Ownership: This scheme allows buyers to purchase a share (typically between 25% and 75%) of a property and pay rent on the remaining portion, significantly reducing upfront deposit requirements.
• Help to Buy Equity Loans: While the national scheme has ended, regional versions for new-build properties are occasionally offered by developers and local authorities, requiring as little as a 5% deposit.

Recent Trends: Deposit Burden and Market Evolution

Across the UK, the average buyer still provides around a 20% deposit, despite rising house prices and increasing rental costs. For many, saving a deposit remains the most significant barrier to homeownership. However, the North West remains relatively affordable when compared to other regions, especially London and the South East, making it an attractive option for first-time buyers.

There's also been a slight increase in the availability of low-deposit mortgages, with lenders adjusting criteria to accommodate long-term renters and younger professionals. Although interest rates remain elevated compared to pre-2022 levels, product variety is slowly improving, especially for those with steady incomes and no major debts.

What This Means for You

Standard route: A 10–20% deposit (£17,000–£35,000) is ideal for securing better interest rates, more lender options, and stronger affordability results.

Low-deposit options: Mortgages requiring 5% deposits are still available from select lenders. They allow earlier entry onto the property ladder, although rates and affordability checks tend to be stricter.

Zero-deposit mortgages: These are extremely niche and should be approached cautiously. Without a buffer, you are more vulnerable to changes in property values or unexpected financial strain.

Saving Strategies

• Use a Lifetime ISA to get the most from government incentives.
• Set up a dedicated, automated savings account for your deposit.
• Explore shared ownership to reduce initial deposit requirements.
• Consider family support through gifted deposits, if available.

Saving for a home deposit in August 2025 is more achievable than many realise, especially in the North West, where prices remain within reach compared to other regions. Whether you're working toward a traditional 10–20% deposit or exploring a low-deposit route, it's vital to understand your options and what fits your lifestyle, goals, and timeframe.

At Farrell Heyworth, we provide expert advice, mortgage guidance, and trusted support through every step of your buying journey. With offices in Preston, Lancaster, Blackpool, and Morecambe, our local knowledge and national insight help you take the next step with clarity and confidence.