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Buying your first home in London is an exciting step — but one of the biggest hurdles is saving for the deposit. Property prices in the capital are much higher than the UK average, which means deposits are also larger. For many entrepreneurs and first-time buyers, this can feel daunting.
In this article, created with Step by Step Financial Solutions and Polish Business Link, we explain how much deposit you really need, what lenders expect, and how you can prepare financially.
Most UK lenders will ask for a deposit of at least 5–10% of the property price. However, in London, where the average property costs over £560,000 (UK House Price Index, June 2025), even a 10% deposit means finding £56,000 upfront.
Because London is more competitive, many buyers aim for a 15–20% deposit. A larger deposit not only improves your chances of approval but can also give you access to better mortgage rates.
The London property market is unique:
High demand, low supply → Properties sell quickly.
Higher average prices → Deposits are naturally bigger.
Competition from investors → First-time buyers often need to show they’re serious with a strong deposit.
“In London, a 5% deposit may technically be enough, but aiming higher — 10% or even 15% — gives you more options and better mortgage deals.”
— Kasia Makarewicz, Senior Mortgage & Protection Adviser, Step by Step Financial Solutions
Set a clear goal – Know the property price range you’re targeting and calculate 10–15% as your target deposit.
Automate savings – Set up a direct debit into a separate savings account each month.
Cut unnecessary costs – Review business and personal expenses to free up cash.
Explore government schemes – First Homes Scheme, Lifetime ISAs, and Shared Ownership can all help.
Look outside prime zones – Areas slightly outside central London can offer lower entry points.
If you run your own business, lenders may want to see a stronger deposit, especially if your income is irregular. A bigger deposit can reassure lenders that you’re a lower-risk borrower.
Having a larger deposit also means borrowing less, which reduces your monthly repayments — freeing up cash flow for your business.
Saving for a deposit in London takes planning and discipline, but it is possible. Whether you’re employed or an entrepreneur, focus on building a realistic savings plan and consider aiming for more than the minimum 5% deposit. The more you put down, the more flexibility and better deals you’ll have when it’s time to buy your first home.
This content is part of our video series “Buying a Home in London”, created with the support of AI and in collaboration with PBLINK Partner Step by Step Financial Solutions. The goal: to help our members take their first steps toward homeownership in London.