Setting a realistic savings target
Start by researching property prices in the area where you want to buy. If the average home costs £250,000, a 5% deposit would be £12,500. Add in estimated costs for solicitor fees, surveys, and moving, and you will have a clear target to work towards.
Breaking the total into monthly savings goals makes it feel more achievable. If you need £15,000 in two years, that is roughly £625 per month. Adjust the timeline or the target area if the numbers feel out of reach.
Using a Lifetime ISA
A Lifetime ISA lets you save up to £4,000 per year towards your first home, and the government adds a 25% bonus on top — that is up to £1,000 of free money each year. You must be aged 18 to 39 to open one and the property must cost no more than £450,000.
The bonus is paid monthly, so your money grows steadily. Just be aware that if you withdraw the funds for anything other than a first home purchase or retirement, you will face a 25% withdrawal penalty that actually leaves you worse off than if you had never used the ISA.
Gifted deposits and family help
Many first-time buyers receive help from family members towards their deposit. Lenders will accept gifted deposits provided the person giving the money signs a declaration confirming it is a gift and not a loan that needs to be repaid.
Some families use other arrangements such as a family offset mortgage, where savings held by a relative are used to reduce the interest you pay, or a joint borrower sole proprietor mortgage where a family member is on the mortgage but not the property title. Your adviser can explain which options suit your situation.