Can I actually afford to buy a house?
You want to get on the property ladder but the numbers feel impossible. Here's how to work out what you can actually afford — and a plan to get there.
The average first-time buyer in the UK is 33 and puts down £61,000. If that makes your stomach drop — hold on. That number is massively skewed by London and the South East. The rest of the country looks very different.
The better question isn't “can I afford a house?” It's “what can I afford, and how long will it take?” That one you can actually answer. Let's do the maths.
How much will a bank actually lend you?
Banks will typically lend you about 4.5 times your annual salary. Some will stretch to 5x or higher, but you'll pay more for it. For planning, 4.5x is a solid number to work with.
Buying with a partner? Your combined salaries count — which makes a big difference. But buying solo doesn't mean you're locked out. You just need to be realistic about your price range.
Sam's borrowing power
Salary: £38,000
Max mortgage (4.5x): £171,000
Total savings: £23,400
Max property price: £194,400 (mortgage + every penny of savings)
You'd want to hold back £3–5k for legal fees and moving costs though — so realistically more like £190,400.
The deposit: how much do you actually need?
You can buy with just 5% down. But you'll pay noticeably more each month because the interest rate is higher. The sweet spots are 10% (much better rates) and 15% (the best rates most banks offer). The bigger your deposit, the less you pay overall.
What a £250,000 property looks like at different deposit sizes
Where Sam stands
Target property: £250,000
Savings so far: £23,400
Gap to 10% deposit: £1,600 to go
Gap to 15% deposit: £14,100 to go
The LISA: one route worth understanding
A LISA is one common route first-time buyers use, if it fits. You put in up to £4,000 a year and the government adds 25% on top — up to £1,000 a year, just for saving towards a house.
Before you open one, understand the constraints:
- You must be between 18 and 39 to open a LISA.
- You can save up to £4,000 per tax year until you're 50, and the government adds 25% (up to £1,000/year).
- The property must cost £450,000 or less.
- The money is locked until you buy your first home or turn 60. If you withdraw for any other reason, there is a 25% penalty — which is calculated on the whole pot including the bonus. You would get back less than you put in. This is not a reversible decision.
You can get a Cash LISA (safe, earns interest) or a Stocks & Shares LISA (could grow more, but could also drop). Buying in the next couple of years? Cash is the lower-risk option. Got 5+ years? Stocks and shares might be worth a look, keeping in mind that the value can fall as well as rise.
What this means for Sam
Saving £200/month without a LISA: 8 months to close the £1,600 gap
With a LISA (£4,000/year + £1,000 bonus): ~6 months
Months shaved off the timeline — just by using the right account.
Stamp duty: probably £0
For first-time buyers, there's no SDLT on the first £300,000. Between £300,000 and £500,000 you pay 5%. If the property costs more than £500,000 you lose FTB relief entirely and pay standard SDLT.
For Sam looking at £250,000? Stamp duty is £0. One fewer thing to stress about.
SDLT thresholds can change. These figures reflect the rates in place from 1 April 2025. Always verify current thresholds on HMRC's website before you exchange contracts.
The costs nobody warns you about
Set aside £3,000–5,000 on top of your deposit for all this. You don't want to get to completion day and realise you're short.
Your game plan
A LISA offers a 25% government bonus (up to £1k/year) but has strict constraints — you must be under 40, buying under £450k, and the 25% withdrawal penalty means you can get back less than you put in. Worth reading how one works before opening it.
Look at what places cost where you want to live. 10% of that number is your target. Write it down.
Standing order on payday. Even £200/month is £2,400/year — plus £600 in LISA bonus if you're maxing it.
Free on ClearScore or Credit Karma. Lenders look at this. Fix anything dodgy before you apply.
About 6 months before you want to buy. Free, takes 20 minutes, and shows sellers you mean business.
It's not as impossible as it feels
Yes, house prices are high. Yes, the average deposit is £61k. But “average” includes people buying half-million-pound flats in London. Outside the South East, a 10% deposit on a £200k place is £20k. That's a very different number.
The expensive mistake isn't buying small — it's not starting at all. Every month without a LISA is a month of government bonus gone. Every year your savings sit in a current account is a year of interest you didn't earn.
You don't need it all figured out. You just need the first step — and that's always the same: open the right account and start putting money in.
2 in 3 first-time buyers do it without help from family. If you're saving on your own, you're the norm, not the exception. A LISA, a standing order, and a clear target will get you there. It just takes a plan and a bit of patience.
Want this built around your actual numbers?
Theo plugs into your bank (read-only, via TrueLayer) and turns this guide into a plan with your actual ISA allowance, pension, and income. Launching Summer 2026.
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