Buying a home is one of the biggest financial goals for most people in the UK, yet the rising cost of property often makes it feel out of reach. For first-time buyers especially, the challenge is usually not about affording monthly mortgage repayments but rather saving a large enough deposit. With average house prices continuing to outpace wages, many people are now asking whether it is possible to buy a house with little or no money at all. While you cannot typically buy a property in the UK with absolutely no funds, there are legitimate routes and schemes that allow you to buy with a minimal deposit or through shared arrangements that reduce upfront costs. Understanding how these work, and what lenders and government programmes offer, can help you move from renting to owning much sooner than you might think.
Can You Really Buy a House with No Money
Technically, buying a property with no money at all is not possible. Every property purchase involves some level of cost, such as legal fees, conveyancing, survey costs, and stamp duty (in some cases). Even with a 100 per cent mortgage, which is rare, lenders will require proof that you can afford repayments and may still charge product or valuation fees.
However, there are realistic ways to buy a home with a very low deposit, often as little as 5 per cent of the property value. There are also innovative ownership schemes, joint ownership arrangements, and financial products designed to support buyers who have limited savings but stable income.
100 Per Cent Mortgages
A 100 per cent mortgage allows you to borrow the entire purchase price of the property without paying a deposit. These mortgages were once common before the 2008 financial crisis but were largely withdrawn due to risk concerns. Recently, however, some lenders have begun to reintroduce them in specific circumstances.
Skipton Building Society, for example, launched a Track Record Mortgage aimed at renters who can prove they have consistently paid rent equal to or greater than potential mortgage payments over a 12-month period. This allows first-time buyers with no deposit to borrow up to 100 per cent of the property’s value, provided they meet affordability and credit criteria.
While 100 per cent mortgages remove the need for a deposit, they do carry risks. Without a financial cushion, borrowers are more exposed to negative equity if property values fall. This means they could owe more than the home is worth, making it difficult to move or remortgage later.
Using a Guarantor Mortgage
Another way to buy a home with no or low deposit is through a guarantor mortgage, where a family member or close relative guarantees the loan. The guarantor either uses savings as security or offers part of their own property’s equity as collateral.
For instance, a Family Springboard Mortgage from Barclays allows a parent or family member to place 10 per cent of the property’s value into a linked savings account for a set period, usually five years. If the borrower keeps up repayments, the guarantor gets their money back with interest.
This type of arrangement can help first-time buyers purchase a home without a deposit while giving the lender extra security. However, it places financial responsibility on the guarantor, who becomes liable if the borrower defaults.
Shared Ownership Schemes
Shared ownership is one of the most effective routes to buying a home with limited funds. Under this government-backed scheme, you purchase a share of a property, typically between 25 and 75 per cent, and pay rent on the remaining portion to a housing association.
You only need a mortgage for the share you are buying, which means the deposit is significantly smaller. For example, if you buy a 25 per cent share of a £200,000 property, you would only need a mortgage for £50,000. With a 5 per cent deposit, that’s just £2,500 upfront.
Over time, you can increase your ownership by “staircasing,” buying additional shares in the property until you own it outright. Shared ownership properties are usually new builds or resale homes owned by housing associations and are designed to help people who cannot afford to buy on the open market.
Help to Buy Alternatives
While the government’s Help to Buy Equity Loan scheme ended in 2023, several other initiatives continue to help people get on the property ladder with limited savings.
The First Homes Scheme offers new-build homes at a discount of at least 30 per cent for first-time buyers and key workers. The discount stays with the property, so future buyers also benefit. This lowers the overall purchase price, reducing both deposit and mortgage requirements.
Lifetime ISAs (LISAs) also help buyers save towards a deposit with a 25 per cent government bonus. You can save up to £4,000 per year, and the government adds up to £1,000 annually. The funds can then be used to buy your first home up to a value of £450,000.
These schemes do not eliminate the need for money altogether, but they can reduce the amount you need to save substantially.
Buying with Someone Else
Buying a home jointly with a partner, friend, or family member can also make the process more affordable. Combining incomes and deposits allows you to meet lender affordability criteria more easily and share the upfront costs.
Joint ownership can take several forms. Joint Tenancy means both owners share equal ownership, while Tenancy in Common allows unequal shares if one buyer contributes more financially. While this can help spread the costs, it is important to have a legal agreement in place to protect each party’s interests if one person wishes to sell or move later.
Using Equity or Assets as a Deposit
If you already own property or other assets, you might be able to use them to secure a new home without needing cash savings. For instance, if you own your home outright but want to buy another, you can release equity through a remortgage or secured loan.
Similarly, some lenders allow deposit-free mortgages where the borrower’s equity in another property or investment portfolio is used as collateral. These arrangements can be complex and may involve higher interest rates, but they can enable purchases that would otherwise be out of reach.
Vendor or Developer Incentives
Some property developers offer incentives such as deposit contributions or gifted deposits to help buyers secure a mortgage. This is common in new-build developments where the developer contributes 5 or 10 per cent of the purchase price towards the buyer’s deposit.
While these deals can make buying more accessible, lenders may view them differently from cash deposits, so it is essential to check with your mortgage advisor. The lender must be made aware of any contributions that are not from the buyer’s own funds.
Rent-to-Buy and Rent-to-Own Schemes
Another innovative way to move towards homeownership without upfront savings is through rent-to-buy schemes. Under these arrangements, you rent a property at a reduced rate for a set period, typically five years, to allow you to save for a deposit. At the end of the period, you have the option to buy the property, often using the savings accumulated during the rental phase.
These schemes are available through some housing associations and local councils and are designed to bridge the gap between renting and owning for people with steady income but low savings.
Credit and Affordability Considerations
Even if you can buy a house with no or low deposit, you will still need to meet lender affordability and credit criteria. Lenders will assess your income, outgoings, debts, and credit history to ensure you can handle repayments.
If you have poor credit or a history of missed payments, it may be harder to access competitive rates. In such cases, improving your credit score before applying can make a big difference. Paying off outstanding debts, ensuring your name is on the electoral roll, and avoiding excessive credit applications in the months leading up to your mortgage application are all helpful steps.
Legal and Upfront Costs
While low-deposit schemes can reduce the financial barrier to entry, buyers still need to budget for additional costs. These typically include solicitor’s fees (around £800 to £1,500), mortgage arrangement fees (up to £1,000), valuation fees (around £300), and potential stamp duty (depending on property price and first-time buyer status).
Some lenders offer cashback deals or cover valuation fees to attract borrowers, which can help offset some of these expenses. It’s also wise to set aside funds for moving costs, furniture, and emergency repairs once you move in.
Risks of Buying with No Money
Buying with little or no money has clear advantages but also carries risks. With minimal equity, any drop in house prices could push you into negative equity, where you owe more than your home is worth. This can make remortgaging or selling difficult.
You may also face higher interest rates, as lenders charge more to offset the increased risk of low-deposit lending. Borrowing without a financial buffer also leaves you vulnerable to unexpected costs such as maintenance, insurance, or income changes.
Before committing, it’s essential to assess your long-term financial stability and seek independent mortgage advice.
Conclusion
While you cannot buy a house in the UK with absolutely no money, there are several legitimate ways to get onto the property ladder with minimal upfront cost. From 100 per cent mortgages and guarantor loans to shared ownership and rent-to-buy schemes, there are creative and practical paths to homeownership even for those without large savings.
The key is to research your options carefully, understand the eligibility criteria, and plan for the associated costs. With the right approach and professional advice, owning a home in the UK is possible even with limited funds, turning what once seemed an impossible dream into a manageable goal.