Lifestyle

How to save for a deposit when renting

9 April 2026

Saving for a house deposit can feel very tricky, especially if you’re already renting a home. Estimates suggest that the average homebuyer in London can expect to save for nine years to raise a 10% deposit. And while this figure may be lower in the rest of the country (roughly 7 years in Birmingham, for example), it still takes a lot of dedication and careful planning to achieve. 

If you’ve got your sights set on getting on the property ladder with Shared Ownership, your mortgage deposit will likely be lower than a standard home purchase. But you’ll still need to set aside a decent chunk of your income to get started. 

To set you on the right path, let’s run through some of the best ways to save for a deposit while renting, so that you can move into your brand-new home as soon as possible.

1. Set a target amount

One of the most important steps when saving money while renting is to know how much you’re actually looking to save. Most mortgage deposits are 5-10% of your total purchase price, which gives you a rough idea of what you’re working towards. 

Shared Ownership deposits are often cheaper, as you’re taking out a mortgage on a portion of the home’s full purchase price. The best way to plan your specific goal is to use our Shared Ownership Affordability Calculator. Simply input your ideal home’s value alongside some other financial information, and you’ll be able to see how the size of your deposit affects your longer-term costs like rent and mortgage payments.

2. Plan your monthly savings goal

Once you’ve got a target in mind, you can work backwards and start to plan how much you need to set aside per month to reach it. This will depend entirely on your personal circumstances, as saving money when renting can be trickier for certain people who have lots of outgoings and bills they need to pay alongside their monthly rent. 

Your monthly savings goal doesn’t need to be ridiculously high, either. Let’s say that you’re looking to save £5,000 and want to move into your new home with your partner in two years. This works out as: 

• Total savings goal: £5,000 
• Time period: 24 months
• Monthly savings needed (per person): £104 (£5,000 divided by 24 months, split into two)  

When you break a large home deposit down in these terms, it all starts to look much more achievable.

“When we looked into Shared Ownership, it turned out we already had the amount of money saved up that we needed to start the process immediately”

– Jamie & Jodie, Carleton Grange residents

3. Open a lifetime ISA

One of the leading Government-backed schemes that can help to save money while renting is a Lifetime ISA (commonly known as a ‘LISA’). This type of ISA allows you to deposit up to £4,000 per year. The Government will then add an additional 25% into your account, effectively boosting you up to £5,000 per year if you reach the annual maximum. 

If you take the money out of your LISA for any reason other than buying your first home or retiring, you can be subject to a 25% penalty on your withdrawal. While this might sound harsh at first, it’s an effective mental barrier that’ll prevent you from unnecessarily withdrawing money that’s going towards your home deposit.

4. Cut rental costs

Saving money while renting can be tough, but you might be making it even harder for yourself, depending on where you choose to live while saving for a house deposit. 

This is because different areas of the UK have very different average rent prices. You can use a tool like the ONS Housing Prices calculator for visibility of this, but at a glance:

• Kensington & Chelsea: £3,640
• Manchester: £1,343
• Colchester: £1,215
• Newcastle upon Tyne: £1,190
• Norwich: £1,142
• Birmingham: £1,087
• Cornwall: £1,004

You might also consider living with family or friends while saving for a deposit, as this can drastically cut rent costs and allow you to set aside more money each month.

“If it wasn’t for Shared Ownership, I’d still be renting and trying to save towards a deposit”

– Chris, a resident at Perry Barr Village

5. Reduce your monthly outgoing expenses

It sounds obvious, but cutting your monthly expenses is crucial for saving money while renting. When you first sit down and plan out your savings timeline, take the time to also review the bills and payments that come out of your account each month. 

Many of these will be necessary, but you’ll likely stumble across treats and splurges that don’t need to eat into your budget plans. Be extra strict with yourself, and keep an eye out for: 

• Takeaways takeover: Try limiting your takeaway consumption to once a week at the very most, and switch to home-cooked ‘fakeaways’ wherever you can to cut down on costs
• Sweet treat splurges: That extra cup of takeaway coffee or luxurious croissant you pick up before work is eating into your budget. Skip it and make a brew at home to cut costs

• Leisure time leeching: We all overspend in the name of socialising, but next time, opt for a low-cost picnic in the park instead of a costly day out with mates. You’ll thank yourself in the long run!