From £13,100 to £44,800: the UK's deposit divide facing first-time buyers

Getting onto the property ladder in Britain has never been a uniform experience, but new research from Nationwide Building Society puts hard numbers on just how unequal it is: a first-time buyer in London needs to save for nine years to scrape together a 10 per cent deposit, while someone buying in the North East can do it in roughly four.

The starting point most buyers actually face is a low deposit on the UK average house price — which, once moving costs and legal fees are added, is the minimum many lenders will accept, and it is where the savings journey begins.

But a 10 per cent deposit — the level Nationwide used for its regional comparison — tells a more complicated story. Nationally, that figure sits at around £23,000. Saving 10 per cent of average net pay, roughly £320 a month, would take a typical buyer nearly six years to reach it.

A 10 per cent deposit in London is over three times larger than the equivalent in the North. It would also take a Londoner nine years to save for their deposit versus around four years for someone buying in the North, based on saving 10 per cent of their average net pay.— Andrew Harvey, Senior Economist, Nationwide Building Society

The regional breakdown is stark. In the North East, a 10 per cent deposit on a typical first-time buyer property is around £13,100. Scottish buyers need approximately £13,900, and those in Yorkshire and the Humber around £15,400. At the other end of the scale, buyers in the Outer Metropolitan area around London — covering towns such as Reading, Guildford and Sevenoaks — face a deposit of £32,800, while in London itself the figure reaches £44,800.

For buyers in the Outer South East — a broad band including Brighton, Oxford, Southampton and Portsmouth — the typical 10 per cent deposit is £26,300, according to Nationwide's calculations.

The burden falls hardest on workers in certain sectors. Nationwide's Harvey noted that for those in sales and customer service, construction, manufacturing labour, cleaning and courier work, typical mortgage payments would represent around 50 per cent of average take-home pay — a level most lenders regard as unaffordable.

In these groups, typical mortgage payments would represent around 50 per cent of average take-home pay.— Andrew Harvey, Senior Economist, Nationwide Building Society

Family money is already filling part of the gap. In 2024–25, over a third of first-time buyers received some help raising a deposit — whether through a gift, a loan from family or friends, or an inheritance, according to Nationwide's estimates.

For those without that safety net, two government-backed tools stand out. The Lifetime ISA allows savers to put in up to £4,000 a year and receive a 25 per cent government bonus — worth up to £1,000 annually — with the pot usable toward a first home priced under £450,000. That threshold has not changed since 2017. The Mortgage Guarantee Scheme and First Homes discounts can also reduce the deposit required, according to MoneySavingExpert.

Experts also recommend treating savings as a fixed outgoing: setting up an automatic transfer into a regular saver or easy-access account immediately after payday, so the money never sits in a current account to be spent. Compound interest rewards those who start early — though rates and eligibility criteria change, so checking current accounts and scheme rules is essential.

Looking ahead, we expect housing market activity to strengthen a little further as affordability continues to improve gradually via income growth outpacing house price growth and a further modest decline in interest rates.— Andrew Harvey, Senior Economist, Nationwide Building Society

Why it matters — With deposit timelines stretching to nearly a decade in some parts of the UK, understanding the regional gap and the government schemes designed to close it is now essential knowledge for anyone planning to buy their first home.

Reported by moneysavingexpert.com, independent.co.uk