A small fortune separates what first-time buyers think they need for a deposit from reality. In London, this gap is almost £100,000.

Nationally, the typical deposit for a first-time buyer stands at £56,700 based on an average property price of £259,700. However, would-be homeowners expect to save just £27,600 — less than half the actual amount required, figures from property site Zoopla show.

In London, where property values are the highest in the country, the divide is particularly stark. First-time buyers believe they need a deposit of £39,800, yet the true figure is closer to £138,800 — a £99,000 disparity.

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The South East follows a similar trend. Buyers in the region expect to put down £22,800 — a shortfall of £45,600.

Northern Ireland stands out as the only part of the UK where perceptions actually exceed reality. Here, first-time buyers estimate a deposit of £42,000, compared to the actual average of £39,000.

Daniel Copley, a consumer expert at Zoopla, said: “Home ownership clearly plays an important role in the aspirations of UK adults. However, achieving this ambition is challenging due to the considerable affordability gap, with our data highlighting the significant disconnect between what first-time buyers believe they need to save for a deposit and the actual amount required.

“This underscores that affordability is a central pillar in people’s home-buying decision-making process. Aspiring homeowners should engage with a qualified mortgage broker early on.

“They can provide essential guidance on deposit requirements, affordability thresholds and available financing options, ensuring buyers are well-informed as they embark on their property journey.”

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The affordability crisis is most acute in southern England, where homes in eight of ten towns are valued at more than four times average annual incomes. In contrast, the outlook is more optimistic in northern regions, where 43% of respondents said they believe homeownership is achievable within five years, compared with just 34% in the South.

Despite a strong cultural emphasis on homeownership, financial pressure continues to dampen ambition. Nationwide, 73% of those surveyed said that the cost of buying a home in their region makes it harder to prioritise ownership. That figure rises to 77% in the West Midlands and 82% in London. Among millennials, only 9% believe they can realistically prioritise homeownership in their area.

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Meanwhile, some first-time buyers had more than £50,000 to put towards the cost of their property in 2022-23 after saving into Lifetime Isas, according to HM Revenue and Customs (HMRC) figures.

Lifetime Isas, or Lisas, were launched to help people get a foot on the housing ladder or help them save for later life.

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A freedom of information (FOI) request made to HMRC by money app Plum found that the top 25 Lisa withdrawals made to buy a home in the financial year 2022-23 averaged £51,000.

People can save up to £4,000 per year into an Isa up to the age of 50, and the government will add a 25% bonus to savings, up to £1,000 per year.

Savers making withdrawals for any other reason than buying their first home or saving for later life face a withdrawal charge of 25%.

If someone is using a Lisa for their first home, the property must cost £450,000 or less.

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