Top Tips for Saving for Your First Home in 2026
If you’re saving for your first home, you’ll know that rising rents, higher everyday costs and uncertainty around the housing market mean saving isn’t always straightforward, even if you’re doing ‘everything right’.
At Southern Housing New Homes, we work with first-time buyers every day. We see the real questions people ask, the challenges they face while saving and the misconceptions that can slow progress or knock confidence. But with the right information, realistic planning and support, saving for a home is still achievable.
This guide brings together practical saving tips, budgeting advice that works in real life and the options available to help you move forward, whether you’re just starting to save or already building your deposit.
How much do first-time buyers need to save in 2026?
This depends on where you want to live, the type of home you’re buying and how you plan to buy it. In most cases, you’ll need a minimum deposit of around 5–10% of the property value, although this varies depending on your lender and mortgage product.
But your deposit isn’t the only cost to plan for. Buying your first home also comes with several other expenses that can quickly add up, including
- Solicitor's fees, covering the conveyancing process.
- Mortgage arrangement and valuation fees, charged by your lender.
- Survey costs, especially if you choose a more detailed report for reassurance.
- Moving home costs, such as removals, storage or essential furniture.
These expenses often arrive close together, so understanding the true cost of moving home helps you avoid last-minute stress and makes sure your saving goal reflects real-life buying costs, not just headline deposit figures.
Best ways to save money for a house deposit
Saving for a home works best when it’s built around habits you can realistically maintain. The most effective saving plans are consistent, flexible and tailored to your lifestyle.
Create a realistic saving goal
Start with a clear overall target, then break it down into manageable monthly amounts. This makes saving feel more achievable and helps you stay motivated over time.
Keeping your deposit in a separate savings account can also help. It creates a mental boundary between everyday spending and money that’s marked for your future home.
Budgeting tips that actually work
Budgeting doesn’t have to mean cutting out everything you enjoy. In fact, overly strict budgets often fail because they’re hard to stick to.
Instead, focus on understanding your spending patterns. Look at where your money naturally goes each month and identify areas where small changes could free up cash, such as:
- Reviewing subscriptions and memberships.
- Switching energy, broadband or mobile providers.
- Planning your meals and taking packed lunches to work, preventing impulse spending.
These budgeting tips don’t rely on extreme cutbacks, but they can make a meaningful difference when you’re consistent.
Automate your savings
One of the simplest and most effective saving tips is to automate your savings. Setting up a standing order to move money into your savings account as soon as you’re paid removes the temptation to spend first and save later. Even small monthly amounts can build into a substantial deposit over time when saving becomes automatic.
Government schemes that can help first time buyers
Saving for a deposit can feel like the biggest barrier to buying your first home, which is why government-backed schemes exist to make homeownership more accessible. They can significantly reduce the upfront costs of buying, helping you to move sooner than you might have expected.
Understanding how each option works and whether it fits your circumstances can help you plan your next steps.
Shared Ownership
Shared Ownership provides an alternative route to homeownership. Instead of buying a home outright, you purchase a share (usually between 10% and 75%) and pay rent on the remaining portion.
Because you’re buying a smaller share, the deposit is typically much lower, as it’s based only on the share you’re purchasing rather than the full property value. This can make Shared Ownership a more realistic option if you’re balancing rent and savings.
Over time, you can also choose to increase your share through a process known as staircasing, giving you more flexibility as your finances change.
Lifetime ISA
A Lifetime ISA is a savings product designed to help you build a deposit more quickly. You can save up to £4,000 each year and receive a 25% government bonus, up to £1,000 annually.
If you’re planning to save over a few years, then this bonus can add up to a meaningful contribution towards a deposit. However, there are eligibility criteria and price caps to be aware of, so it’s important to understand the rules before opening or using a LISA.
London Living Rent
If you’re looking to eventually buy a home in London through Shared Ownership, London Living Rent could help you build up your savings more easily. Homes are offered at rents based on local incomes rather than market rates, making it easier to put money aside each month.
For first time buyers struggling to save while renting at full market rates, London Living Rent can provide a more manageable stepping stone towards homeownership.
Common saving mistakes to avoid
Saving for your first home is rarely straightforward, and it’s easy to feel discouraged when progress slows. During expensive months, instead of pausing your savings, adjust your contributions temporarily – even smaller amounts help maintain momentum and make it easier to build savings back up when costs settle.
The cost of living fluctuates, so be sure to keep reviewing your budget. Adapting your saving plan can help you stay realistic and avoid unnecessary setbacks.
Looking for your next home?
Saving for a house deposit takes time, patience and commitment. Progress can be gradual, plans may change, and circumstances often evolve along the way. By understanding how much you need to save, building habits that work for your lifestyle, and exploring support such as Shared Ownership, you can make informed decisions at every stage of your journey, from your first savings goal through to moving day.
At Southern Housing New Homes, we support first time buyers with a range of Shared Ownership, London Living Rent and Open Market homes across London and the South East, offering practical routes to homeownership and guidance you can trust.
Browse our range of available homes.