You need £17,000 for a first home - here's how to do it
Source: BBC Business ↗ (cross-verified by 2 outlets — full list below)
A new “Your First Home” scheme announced on Saturday aims to ease the burden for first‑time buyers in England by lowering the deposit needed to purchase a property. With the average UK house now priced at £272,000, a 5 % down‑payment plus moving and legal costs totals roughly £16,850, according to Moneyfacts, a figure that many prospective owners find daunting. The government‑backed initiative is designed to help savers reach that target, while experts outline four practical ways to start building a deposit: regular contributions to a savings account, using a Lifetime ISA (LISA) that adds a 25 % bonus up to £1,000 a year, exploring high‑loan‑to‑value mortgages that require as little as £5,000 up‑front, and seeking parental assistance.
The most impactful tool highlighted is the LISA, which permits individuals to save up to £4,000 annually and receive a 25 % government top‑up, effectively turning a £4,000 contribution into £5,000. However, the scheme is restricted to homes priced at £450,000 or less and funds can only be withdrawn for a first‑home purchase, after age 60, or in the event of terminal illness; any other withdrawal incurs a penalty that can erode the original savings. Ministers have signalled plans to replace the LISA with a new First‑Time‑Buyer ISA, though details remain unsettled. Savings experts also stress the power of compound interest: depositing £50 a month from age 20 could grow to about £41,000 by age 50 at a 5 % annual rate, whereas starting a decade later would require more than double the monthly contribution to achieve the same outcome.
Beyond savings accounts, the article notes that some lenders now offer mortgages with deposits as low as £5,000, allowing borrowers to finance up to 98‑99 % of a property’s price, though eligibility varies and such deals may not suit everyone. A growing trend sees parents supporting their adult children, either by charging rent that is redirected toward a deposit or by providing direct financial help; a Nationwide Building Society survey found that over half of parents who rent to their children also contribute to their home‑buying fund. Together, these options illustrate a shifting landscape where, despite high house prices, a combination of government incentives, disciplined saving, high‑LTV mortgages, and family support can make the first‑time purchase more attainable.
⚡ Effects Interpreter
🌍World Economylow impact
What this means for you
- ▶Ripples from this can reach factories and ports far away.
- ▶The global growth story might get a slight rewrite after this.
🏙️Local Economylow impact
What this means for you
- ▶Household bills may drift in step with the bigger economic picture.
- ▶Wages and hiring nearby can bend with the wider economy.
🏦Rates & Banksmedium impact
What this means for you
- ▶Your monthly repayments are far more likely to hold steady than to spike.
- ▶Banks tend to wait and see before nudging the rates they offer.
❤️Healthhigh impact
What this means for you
- ▶Local surgeries and clinics might see a short-lived rise in enquiries.
- ▶Unsettling news can weigh on sleep and mood, so peace of mind matters.
💷Wealthlow impact
What this means for you
- ▶Your financial adviser, if you have one, might already be watching this.
- ▶It's a reasonable moment to check your investments are still on track.
🏠Housinglow impact
What this means for you
- ▶Anyone mid-purchase might want to keep an eye on how this unfolds.
- ▶Surveyors and valuers tend to factor in wider trends gradually, not overnight.
🌍 Effects for your country
The U.S.'s central bank rate currently stands at 3.75%, so a global rates move like this could feed through to local borrowing costs. The U.S.'s economy is growing at 2.3% with inflation at 3.2%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track the U.S.'s own central bank rate closely. With the U.S.'s unemployment at 4.4%, personal-finance effects like this land on a labour market that is currently fairly stable. Health-system effects are harder to localise from economic indicators alone — the real impact in the U.S. depends more on local healthcare capacity than the figures above.
The UK's central bank rate currently stands at 3.75%, so a global rates move like this could feed through to local borrowing costs. The UK's economy is growing at 0.8% with inflation at 3.2%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track the UK's own central bank rate closely. With the UK's unemployment at 5.6%, personal-finance effects like this land on a labour market that is currently fairly stable. Health-system effects are harder to localise from economic indicators alone — the real impact in the UK depends more on local healthcare capacity than the figures above.
France's central bank rate currently stands at 2%, so a global rates move like this could feed through to local borrowing costs. France's economy is growing at 0.9% with inflation at 1.8%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track France's own central bank rate closely. With France's unemployment at 7.9%, personal-finance effects like this land on a labour market that is already under strain. Health-system effects are harder to localise from economic indicators alone — the real impact in France depends more on local healthcare capacity than the figures above.
Romania's central bank rate currently stands at 6.5%, so a global rates move like this could feed through to local borrowing costs. Romania's economy is growing at 0.7% with inflation at 7.8%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track Romania's own central bank rate closely. With Romania's unemployment at 6%, personal-finance effects like this land on a labour market that is currently fairly stable. Health-system effects are harder to localise from economic indicators alone — the real impact in Romania depends more on local healthcare capacity than the figures above.
The UAE's central bank rate currently stands at 3.65%, so a global rates move like this could feed through to local borrowing costs. The UAE's economy is growing at 3.1% with inflation at 2.5%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track the UAE's own central bank rate closely. Health-system effects are harder to localise from economic indicators alone — the real impact in the UAE depends more on local healthcare capacity than the figures above.