Saving for a house deposit when you’re on a modest income can feel overwhelming.
With property prices staying high and the cost of living increasing, getting onto the property ladder might seem like a stretch.
But with a little planning and the right approach, it’s possible to make steady progress.
Here’s a simple guide to help you start working toward that first home.
Step 1: Work out how much you need
Before anything else, figure out your goal as it will give you something concrete to aim for.
Start with property prices:
- Look up the average home price in the area you want to live. Sites like Rightmove and Zoopla are good places to start.
- For example, if homes in your area are around £200,000, then you’ll need a minimum of £10,000 for a 5% deposit or £20,000 for 10%.
Factor in extra costs too:
- Stamp Duty: First-time buyers in England and Northern Ireland don’t pay Stamp Duty on homes under £425,000.
- Legal fees: Usually between £500 and £1,500.
- Surveys and valuations: These often cost £250 to £600.
- Moving costs: This depends on distance and how much you’re taking with you.
What to do: Try the MoneyHelper Budget Planner to understand your income and outgoings.
From there, set a savings goal that feels manageable.
Step 2: Open a Lifetime ISA (LISA)
A LISA is one of the most helpful tools out there for first-time buyers. It’s backed by the government and offers a bonus on your savings.
Here’s how it works:
- You can save up to £4,000 a year.
- The government adds a 25% bonus, up to £1,000 annually.
- You need to be aged 18–39 to open one.
- You must have the account open for at least 12 months before using it to buy a home.
Some popular LISA providers in 2025:
- Tembo – Known for strong interest rates and a user-friendly app. Learn more
- Skipton Building Society – Offers both online and in-person support. Check their options
- Moneybox – App-based with investment options. See what they offer
What to do: Compare providers to find one that fits your needs, whether you prefer high interest, easy access, or extra features.
Step 3: Review your spending
Small changes in your day to day spending can add up. The goal isn’t to cut everything out, it’s about being more mindful.
A few ideas:
- Use budgeting apps: Tools like Snoop or Emma help you track where your money goes.
- Reduce extras: Cut back slightly on takeaways, subscriptions, or impulse purchases.
- Shop smarter: Look for discounts, plan meals ahead, and try apps like Too Good To Go for cheaper food options.
What to do: Once you’ve identified savings, set up an automatic transfer to your LISA or savings account. Ideally just after payday.
Step 4: Look for ways to boost your income
Extra income, even in small amounts, can help you build your deposit faster.
Some options:
- Freelance work: If you have a skill like writing, design, or admin, try sites like Fiverr or PeoplePerHour.
- Part-time roles: Weekend or evening jobs in retail, hospitality, or customer service can add a bit of extra cash.
- Sell things you no longer need: Use platforms like Vinted or eBay to sell clothes, electronics, or household items.
What to do: If possible, put all this extra income straight into your savings to avoid spending it elsewhere.
Step 5: Make use of government schemes
There are several schemes in the UK that aim to help first-time buyers.
- First Homes Scheme: Offers new build properties at a 30–50% discount for eligible buyers. More info
- Shared Ownership: Buy a portion of a home and pay rent on the rest. Read more
- Rent to Buy: Rent at a lower rate, with the option to buy later. Explore this scheme
What to do: Visit Own Your Home to see which options might be available to you locally.
Step 6: Keep track and stay encouraged
Saving for a home can take time and that’s okay. Stay focused and keep things moving, even if progress feels slow.
Helpful habits:
- Set smaller targets: Break your deposit goal into chunks so each milestone feels more achievable.
- Celebrate wins: When you reach a milestone, treat yourself to something small.
- Stay informed: Keep an eye on property market updates through sites like Rightmove or Zoopla.
What to do: Use a simple tracker, an app, spreadsheet, or visual chart, to see your savings build over time.
Final thoughts
Saving for a deposit on a modest income can be challenging, but it’s definitely possible.
The key is to stay realistic, use what’s available to you, and stick to a plan that works for your situation.
If you need more tailored advice, check out resources like MoneyHelper or Citizens Advice. They offer free support to help you make confident financial decisions.
