Can You Buy A House In The UK With A 10K Deposit?

While 10% deposit is generally considered the standard rate banks will grant a mortgage, many mortgage providers will offer you a loan based on a deposit as small a 5% of the property’s value, which is also known as LTV (loan-to-value). With a £10,000 deposit, this means that you could be looking to purchase a property that’s worth up to £200,000. 

That said, there are a few schemes that could help you buy a property with a smaller LTV deposit below 5%, which we’ll look at in more detail later on. 

As of today in 2024, the average house price in the UK is £282,000, so 5% of that would be £14,100 taking you slightly over your £10k limit, but of course, this is just an average figure and includes all types of houses across the whole of the UK, so for you specifically, that figure will vary massively depending on what kind of house you’re looking for and where it’s located. 

Let’s say, for example you’re looking to purchase a 2-bed terraced house in North West England, which currently sits at an average of £166,721. 5% of that is £8,336, which also leaves a little left over. Happy days! 

But, what if you want to set your sights on something bigger with a higher price tag, is there any help out there for you to secure your dream home? The good news is yes, there is…

If you already know you want a bigger home, say a semi-detached or detached with 2 or more bedrooms, but £10k is the maximum you can put down as a deposit, there are alternative ways you can achieve this. 

The government’s First Home Scheme aims to provide newly built homes at a discount of at least 30% to local first-time buyers. These discounted properties offer a significant opportunity for you to step onto the property ladder with greater affordability. Eligibility criteria and availability vary depending on location, so it’s certainly worth checking out. 

Another option is Wain Homes' "Home Reach" scheme, which offers you the opportunity to purchase a share of a property (usually between 50% and 75%) which you can get a mortgage on and pay rent on the remaining portion. This scheme provides a flexible and affordable way for buyers with smaller deposits to step onto the property ladder, with the option to increase ownership stake over time through a process known as staircasing. 

Additionally, for those who qualify, there is the option of a zero deposit mortgage, which is offered by Skipton Building Society called the “Track Record Mortgage”. This financing solution removes a significant barrier to homeownership for those with limited savings, offering an entry-level opportunity to get onto the property ladder. With this kind of mortgage, you could save your £10k and put it toward the other costs associated with buying and moving.

If you’re willint to explore unconventional financing options, guarantor mortgages or joint mortgages with family members or trusted partners could provide a pathway to homeownership. By leveraging the financial stability and creditworthiness of a guarantor or co-borrower, your £10k deposit may increase your borrowing capacity and access a wider range of mortgage products.

However, it's important to approach the property market with realistic expectations and a clear understanding of the associated costs. Beyond the deposit, it’s worth noting that you need to consider additional expenses such as solicitor fees, survey costs, stamp duty (if you’re not a first-time buyer), and ongoing mortgage repayments, as well as maintenance and insurance expenses.

So, there you have it, proof that £10k is enough for a house deposit. Hooray! However, as you can see, your specific house-type options could be limited, which means you might want to consider exploring alternative financing options, whether that’s through a scheme or through a joint ownership agreement.

If you’d like more information about this, or you’d like to start your search with one of Wain Homes’ new builds, we’d be happy to talk.