Getting on the property ladder remains a serious challenge for first‑time buyers, with new research from Nationwide revealing the average deposit needed now sits at £23,000.
Prospective homeowners must save around 10 per cent of their monthly wages for roughly six years to reach that target for a starter home.
Sophie Graham, a personal finance expert at Sunny, told GB News the Lifetime ISA (Lisa) remains one of the most effective tools available to first‑time buyers, despite proposed reforms.
She said the Government bonus “can still significantly shorten the time it takes to build a deposit” for those confident they will buy within the scheme’s rules, adding that the product “doesn’t automatically become a bad option” under the changes.
“Saving for a deposit is rarely about finding the perfect account or making huge sacrifices,” Ms Graham said.
“Most people struggle because of small, everyday habits that add up over time. What matters most is choosing a savings route that fits your goals and sticking with it consistently.”
Nathan Emerson, chief executive of estate agency group Propertymark, said the six‑year saving timeline shows “just how significant the deposit barrier remains, especially in London and the South of England”.
Getting on the property ladder remains a serious challenge for first‑time buyers
|
GETTY
Regional differences
• Inner London: £44,800 deposit — around nine years of saving
• Outer London: £32,800
• Outer South East: £26,300
• South West: £24,700
By contrast, the north east offers the most affordable route onto the ladder, with deposits averaging £13,100 — achievable in around four years.
Scotland follows at £13,900, Yorkshire and the Humber at £15,400, and Wales at £17,300.
House prices have remained broadly flat over the past year
|
GETTY
House prices have remained broadly flat over the past year, giving savers a chance to catch up.
Andrew Harvey, Nationwide’s senior economist, said affordability constraints had eased “somewhat” thanks to earnings growth and falling mortgage rates.
Mortgage rates have also been dropping, with some lenders offering 10 per cent deposit deals at rates as low as 3.96 per cent on two‑year fixes.
First‑time buyer activity rose 20 per cent last year compared with 2024, and lenders have loosened affordability criteria, allowing buyers to borrow more with smaller deposits.
Nearly half of first‑time buyers in December opted for mortgages requiring only a 10 or 15 per cent deposit.
The Lifetime ISA offers a 25 per cent government bonus worth up to £1,000 a year on savings of up to £4,000. Savers can contribute until age 50, provided they opened the account before turning 40.
Ms Graham said the reforms make it even more important for savers to be realistic about whether a Lisa suits their circumstances.
“A Lisa is best suited to people who are reasonably sure they’ll buy a qualifying property and won’t need to dip into their savings early,” she said.
“If there’s uncertainty around location, price limits or timing, it can be sensible to balance a Lisa with high‑interest savings accounts or regular saver products, which offer more flexibility.”
Areas in the north remain more afffordable
|
GETTY
She added that consistency matters more than chasing quick wins. “Automating savings, reviewing regular spending and increasing contributions gradually as income grows can make the process feel far less daunting,” Ms Graham said.
“Combining steady saving habits with targeted tools like a Lifetime ISA often matters more than chasing short‑term wins.”
“Ultimately, getting the keys to a first home isn’t about one perfect product.
“It’s about understanding what’s getting in the way, making realistic changes, and using incentives like the LISA thoughtfully so saving feels manageable, not overwhelming.”
