How to save your deposit faster despite rising costs when you’re a first-time buyer

When you’ve found the house of your dreams but have no idea how to raise the deposit and upfront buying costs, it’s easy to feel despondent.  Especially in the current economic climate.  This month, we delve into why saving for a property feels like scaling Everest at the moment and offer some helpful tips to start climbing that mountain with confidence.

It’s such an exciting time when you start browsing online for your first home.  You already know what sofa you want, and you’ve been dreaming of a little garden for years now!   But as soon as you start adding up the upfront costs, your bubble of excitement suddenly pops.

You’re not alone.  Last year, the Home Builder’s Federation estimated that the average first time buyer would need to save 50% of their income for a decade to be able to afford a deposit¹.  And while that average will be skewed heavily by homebuyers in the London area, it still shows the disparity between available income and property affordability.

As a mortgage adviser I speak to a lot of first-time buyers who find themselves in this frustrating predicament.  And the good news is, with some upfront planning, flexibility and dedication to saving, there is light at the end of the tunnel.

So far in 2025, just under a third of all house purchases were first time buyers⁵, so it IS possible.

Why saving for a deposit is so hard for first time buyers now?

Saving enough money for a deposit and the cost of moving has always been a huge challenge for first time buyers.  A combination of relatively low incomes for those at the start of their career, high minimum deposits and possibly not having a “saving mindset” can all hinder the process.

But there are three reasons you might be finding it harder than usual to put money aside at the moment:

• • • You might have less disposable income thanks to the increase in living costs. Rental costs are 5.7% higher this year compared to 2024², and the cost of food is significantly higher than it was in 2021 despite a softening inflation rate⁶. 
    • It is more challenging to get a stable and significant income Graduate unemployment rates have been steadily increasing³ in part due to a reduction in advertised graduate roles. Additionally, there have been a rise in temporary job roles⁴, which can affect the reliability of income and make budgeting even harder.
    • It’s not as easy to access help from family – The bank of mum and dad used to be the stalwart of savings for many first-time buyers. Increasingly though (especially among Baby Boomers and Gen X) their ability to help financially is limited due to healthcare costs, funding their own retirements and the impact of inflation on their savings. 

How can you save for a deposit faster?

A few months ago we wrote a mini-blog about saving for your first house purchase and in there we covered ideas such as getting clear on your excess income, budgeting, setting up a separate savings account etc.

But when you’re faced with the sort of challenges we’ve just outlined, we need to get a bit more specific.  Here are some of the ideas I’ve given my clients in the past when saving for their new home has seemed impossible:

• Challenge yourself to be flexible – consider every avenue that might bring your savings goal down. Are you open to moving to a cheaper location or a smaller property that won’t require such a high deposit?  There are also options which require less than 5% deposit, which could be an option.
• Consider multiple income streams – now I realise a side-hustle won’t be an option for everyone, especially if you have a busy life outside of your day job, but have you thought about selling old clothes on Vinted, upcycling furniture, offering handyman services, dog-walking or online product selling?
• Government schemes – we’ve touched on these in our blog about the new mortgage guarantee scheme, and our broader article about first time buyers.  If raising the whole deposit on your own is unachievable, have a look on the government website to see if you might be eligible.
• Choose your savings account wisely – Find a savings account that pays a generous interest on the money you’re putting aside. The Money Saving Expert site is always a brilliant resource for finding the best options.  You could also consider LISA’s where the government boost your savings towards a house purchase.
• Delay ownership strategically – This might not be a popular suggestion, because it does inevitably delay the excitement (and in some cases the necessity) of home ownership. Having said that, setting your savings goals upfront and having a realistic view of when it’s right for you to get on the property ladder can set you up for success and remove the stress.
• Consider Equity release – If your family want to help, but don’t have access to funds, they could consider equity release, if it’s right for their circumstances.

Staying motivated while saving

If you’ve never saved with a goal in mind before, it can feel like an unrewarding chore.  It’s so important to keep yourself motivated:

• Find a way of visually tracking what you’ve saved – This can be a fancy spreadsheet with graphs and colour-coding, or it could just be a series of boxes that you colour in each month. 
• Break your overall goal down into smaller chunks (weekly or monthly goals) – otherwise it might seem like you’re never doing enough.
• Celebrate small milestones – When you reach your first goal, find a way of giving yourself a pat on the back (that doesn’t cost too much of course!). Treat yourself to your favourite coffee, tell family and friends or just reflect on a job well done.

How can Downton Mortgages & Financial Services help?

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I set up Downton Mortgages & Financial Services to give people confidence in their financial decisions.  We do that by making your options clear and easy to understand.  There are no silly questions, and we are on hand to help every step of the way from research through to application.

For more information about our services look at our website here or alternatively, get in touch for a no-obligation chat about your circumstances and house-buying plans.

Sources

1 Broken Ladder: Examining the affordability of home ownership (The Home Builders Federation)

2 Big Issue Article – Rents in UK are at record high

3 Graduate Labour Market Statistics

4 Neuven – UK Labour Market Sees Rise in Temporary Workers Amid Broader Signs of Weakness

5 This Is Money article – First time buyers make up a record proportion of house sales

6 BBC article – Why is UK inflation still high?

Other blogs we’ve written on related topics

5 Essential Questions for first-time buyers

First-time buyers – building up your savings

Important Information

The information contained within was correct at the time of publication, but is subject to change (October 2025).

Please note that for all mortgage products, terms and conditions apply. This information is a summary only. You will receive full documentation upon application, which sets out the terms, conditions, and limitations of lending provided.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.