Property deposits are key for securing a good mortgage deal and being able to afford the home you want.
If you lack practical experience in London house deposits, read this article to find out
- What the average house deposit in London is
- What is a good % for a house deposit
- How to decide how much deposit you should put down
- Whether you can buy a house in London with a £50k, £40k, or £30k deposit.
What is the average deposit for a house for a first-time buyer in London?
According to Zoopla, the average first-time buyer property in London costs £425,000. So, an average deposit is £144,500.
In contrast to the property price, the average first-time buyer put down a deposit of 33.99%.
What is a good % deposit for a house in London?
Generally speaking, aiming for 15% to 20% of the total property value is a good goal.
Such a deposit will not only reduce your monthly mortgage payments. You’ll also be able to get a good mortgage deal with decent interest.
So, for example, if you want to buy a property in London for £500,000, you should have a deposit of between £75,000 and £100,000.
The average property price in London
In January 2025, the average property in London sold was £569,087.
By comparison, the UK average was £291,397.
The main factors that influence this are:
1. Location
Where you live in London makes a big difference to property costs.
There are 32 boroughs in London (excluding the City of London).
Average prices range between these, from £415,729 in Newham to £1,120,654 in Kensington and Chelsea.
2. Type of property
The type of property you buy makes a big difference everywhere.
London’s property profile is different most of the UK. In London, the break down is:
- Houses and bungalows make up 45.8% of property
- Flats in low-rises (2 – 4 storeys) make up 42.5%
- Flats in high-rises (6 or more storeys) make up 11.7%
And each of these categories has different average prices:
- Flats average at around £528,000
- Detached houses cost on average £1.3m
- Semi-detached houses cost on average £808,000
- Terraced houses cost on average £796,000.
Again, note that these are the average property prices by type across the entirety of London.
How do you decide on how much deposit to put down as a first-time buyer?
As a first-time buyer, deciding exactly how much money you want to deposit can be difficult.
Here are some things to consider that will help you decide on the amount of money you want to put down as your deposit.
1. Assess your finances
The first step you want to take is to assess your current financial situation.
When doing so, consider your income, monthly expenses, and outstanding debts.
Once you have done all the maths, it’s time to move on to the next step.
2. Determine your target home price
When shopping for a property, you must set a budget that fits your financial abilities.
Doing so will prevent you from wasting time on properties you can’t afford.
You don’t want to expensive property that later becomes a financial burden .
3. Understand your lender’s requirements
Depending on the lender you choose for your mortgage, they’ll have a certain minimum deposit.
While some lenders would accept a 5% deposit, others prefer a minimum of 10% or even 20% upfront.
So, before you take any steps forward, do your research and settle for a lender that works for you.
4. Calculate the minimum deposit necessary
Once you know your lender’s requirements, calculate the minimum deposit necessary.
Generally, aiming for around 20% of the property’s value is best.
So, if you’re considering buying a property for £750,000, a 20% deposit would be £150,000.
5. Consider your long-term goals
Getting a mortgage is a long-term financial decision.
So, before you sign the documents, it’s crucial to consider your long-term goals and what you want to achieve.
If you want high cashflow, putting down a larger deposit is a good idea, as your monthly premium will be lower.
6. Evaluate the risk you are willing to take
If you’re happy with taking on some extra risk, you can opt for a lower deposit.
If you were to take this route, your monthly premiums would be higher as you’ll have more money to pay off.
Can you buy a house in London with a 50K/40K/30K deposit?
That would depend on the price of the property you’re looking at buying. And what percentage of the total property value you want to put down as a deposit.
The bare minimum of a deposit is typically around 5%. So a £30,000 deposit will be enough for a £600,000 property.
That said, putting down a 5% deposit won’t give you access to good mortgage rate. This means your monthly premium will be quite high.
So, if we were to stick to the 20/80 rule, a 20% deposit that totals:
- £30k would cover a property worth £150,000
- £40k would cover a property worth £200,000
- £50k would cover a property worth £250,000.
Remember, London property prices are almost double those in other parts of the UK. So, buying a house with such a deposit is not impossible, but it can be tricky.
This is especially true if you want to purchase a property in one of the better parts of London.
Alternatives
One way you can find a property that would meet your budget for a deposit is to look at people looking to sell their house fast off the market.
If you can reassure them that you’re ready to move forward quickly, they are typically more likely to settle for a little less.
Buying your first home in London can be a daunting experience. And rightfully so. little less if you can reassure them that you’re happy to move forward quickly.
Buying your first home in London can be a daunting experience. And rightfully so. You’re about to sign for a multi-decade mortgage that’ll likely be worth hundreds of thousands of pounds that you’ll need to pay off.
Fortunately, getting a mortgage doesn’t have to be scary, and one way to lower your stress during the process is to get a deposit that works for you
