04 February 2015

Saving for a deposit

If you’re looking to buy your first home in 2015, you're probably working hard to save up your deposit. Here we look at how you could save for it – whether it’s moving back in with your parents to save some cash, taking out a savings account or ISA, or even seeing what government help is available.

What deposit will you need?

So, how much will you need? Nationwide’s November 2014 house price index showed the average price of a UK property was £189,388 last year, although clearly most first time buyers don't have this sort of money spare.

According to the Money Advice Service, the average first-time buyer will put down a 20% deposit on their first home. So, as a rough guide - if you’re looking to buy a property at the UK average of £190,000 you'll probably be saving for a deposit of £38,000.

Become a boomeranger

'Boomerangers' is a term for young adults who move back to the parental home – whether after finishing higher education, following a relationship break-up, or just to help save up for a deposit.

If you've had to move back in with Mum and Dad you're far from alone. According to research from the Office of National Statistics, 3.3 million 20-34 year olds were living with their parents in 2013- a massive 25% increase since 1996.

While it's definitely not for everyone, moving back in with parents can be a great opportunity to save money for a deposit. If you’ve been renting, you’ll immediately reduce your overheads. With HomeLet (PDF) calculating the average UK rent at £708 per month in October 2014 (that's excluding London) it's easy to see why so many are choosing to head back temporarily.

Government packages

Through the Government-backed Help to Buy scheme you could buy a home with a deposit of just 5% of the purchase price. The scheme is for both first-time buyers and home-movers, and applies to new-build and older homes worth up to £600,000.

First-time buyer savings accounts

Becoming a boomeranger not an option? You could opt for a savings account, but remember that some lenders, including Nationwide, offer mortgage and savings accounts designed specifically for first-time buyers. For example, our Save to Buy savings account could give you access to a Save to Buy mortgage if you keep the account for 6 months and meet the eligibility criteria. (Opening a Save to Buy savings account does not guarantee acceptance for a Save to Buy mortgage. All mortgages are subject to eligibility, underwriting and criteria.)



A cash ISA is like a 'tax-free wrapper'. They’re similar to savings accounts with the exception that the interest you earn on them isn’t taxed, and you can only add a set amount each tax year. If you’re saving for a deposit, an ISA could be a good idea, especially since changes to ISAs means for the 2014/2015 tax year your annual personal allowance is now £15,000.
Nationwide offers a range of ISAs if you’d like to find out more.

Useful tools and guides

Legal Information

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