First-Time Buyer in London: How Much Deposit & Income Do You Really Need?
- Home Sorted
- Jan 15
- 4 min read
Buying your first home in London is exciting, but it can also feel overwhelming. With property prices higher than the UK average, most London first-time buyers ask the same questions:
How much deposit do I need, and how much do I really need to earn to buy in London?
Who Is Classed as a First-Time Buyer in the UK?
You’re considered a first-time buyer if you’ve never owned a property anywhere in the world. This matters because first-time buyers may benefit from:
Access to low-deposit mortgage products
Specific lender schemes
Stamp Duty relief (where applicable)
These benefits are particularly important when buying in London.
How Much Deposit Do First-Time Buyers Need in London?
Typical minimum deposit: 5% (with limited 0% options)
Most mortgage lenders require a minimum 5% deposit from first-time buyers.
However, a small number of lenders now offer 0% deposit mortgages to eligible first-time buyers.
These 0% deposit mortgages are:
Available only through specific lenders
Subject to strict affordability and credit criteria
Often offered at higher interest rates
Limited in availability and not suitable for everyone
Because of this, many London first-time buyers still plan for a 5–10% deposit to access a wider range of lenders and more competitive rates.
What deposit do most London buyers use?
In practice, many first-time buyers in London aim for:
5% deposit - lowest entry point, limited lender choice
10% deposit - more options and better rates
15–20% deposit - improved affordability and flexibility
Example: £500,000 London property
0% deposit = £0 (limited schemes only)
5% deposit = £25,000
10% deposit = £50,000
15% deposit = £75,000
Is £20,000 Enough for a Deposit in London?
Sometimes — yes. £20,000 may be enough if:
You’re buying around £400,000 at 5% deposit
You qualify for a specific low-deposit or 0% deposit scheme
You’re purchasing through shared ownership
However, it’s important to remember that your deposit is not the only upfront cost. You’ll also need to budget for:
Solicitor fees (Typical cost in London: £1,500–£2,500. Can be higher for leasehold properties or complex transactions)
Survey and valuation costs (Optional but strongly recommended to identify issues with the property. HomeBuyer Report: ~£400–£700, Full Building Survey: ~£700–£1,500+)
Moving expenses (These vary depending on how much help you need: Removals company: £500–£2,000+ (especially within London)
Additional costs may include storage, parking permits, or packing services
These are paid separately from the deposit.
Tip for first-time buyers
A good rule of thumb is to budget an extra £3,000–£5,000 on top of your deposit to comfortably cover these costs when buying in London.
How Much Do I Need to Earn to Buy a Home in London?
Most lenders will typically lend around 4 to 4.5 times your annual income.
In strong cases, some lenders may consider higher income multiples — up to 5 or even 6 times income — usually where buyers:
Have high and stable earnings
Have low existing financial commitments
Are buying jointly
Have strong credit profiles
Higher income multiples are not guaranteed and always depend on individual circumstances and lender criteria.
How Much Do I Need to Earn to Buy a £500,000 Home in London?
Example with a 10% deposit (£50,000):
Mortgage required: £450,000
Typical combined income needed: around £90,000–£100,000
Example with a 5% deposit (£25,000):
Mortgage required: £475,000
Income requirements are often higher
0% deposit scenarios:
Borrowing the full £500,000
Very strict affordability and credit assessment
Limited lender availability
These figures are indicative only. Actual affordability will depend on your full financial profile.
How London Affects Mortgage Affordability
Affordability in London works differently compared to many other parts of the UK.
Many first-time buyers rely on:
Joint incomes
Longer mortgage terms
Family-gifted deposits
Lenders also take into account London-specific living costs such as:
Childcare
Transport
Higher everyday expenses
All of these factors influence how much you can borrow.
Can First-Time Buyers in London Get a Mortgage If They’re Self-Employed?
Yes. Many first-time buyers in London are self-employed or work as contractors.
Most lenders will usually ask for:
1–2 years of accounts or tax calculations
Evidence of sustainable income
A good credit history
Some lenders are more flexible than others, particularly for sole traders and contractors.
What Else Do Lenders Consider?
In addition to deposit and income, lenders assess:
Credit score and repayment history
Existing debts and financial commitments
Employment stability
Property type and condition
All of these affect mortgage availability and affordability.
How Do I Know What I Can Really Afford?
Online mortgage calculators are a helpful starting point, but they don’t show the full picture.
A proper affordability assessment considers:
Your income structure
Your deposit source
Your monthly comfort level
Your longer-term plans
This helps you search for a home in London with confidence and avoid overstretching financially.
There’s no single “right” deposit or income level for buying your first home in London. What matters is finding a mortgage that fits your lifestyle, budget, and long-term goals - not just the maximum number on paper.
If you’d like to understand what you can realistically afford in London, you can request a no-obligation call to talk things through.
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