My buyer wants to pay a 5% deposit on exchange. Should I agree?
Published 18 September 2026 · 7 min read · By Evren Ergin
This is a common request, especially from first-time buyers who have put most of their savings into the mortgage deposit, and agreeing to it is often fine. The safe way to say yes is to accept 5% on the day while your solicitor keeps the contract saying the buyer owes the full 10% if they fail to complete, and to check your own onward purchase does not need the missing money.
TL;DR
- •The standard exchange deposit in England and Wales is 10% of the price, but a seller can agree to less in writing, and 5% has become increasingly common.
- •The exchange deposit is your security if the buyer pulls out after the sale becomes legally binding; if they fail to complete you can keep it and claim further losses.
- •Before agreeing, ask your solicitor to keep the buyer liable for the full 10% if they default, and check whether your own purchase needs a 10% deposit from you.
- •Bank of England figures show 8.4% of new mortgage lending in spring 2026 went to buyers borrowing over 90%, so more buyers are asking for this.
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What is the exchange deposit, and why does it matter?
The exchange deposit is the money the buyer pays at exchange of contracts, the moment the sale becomes legally binding. Under the standard conditions used in most residential contracts it is 10% of the price, held by your solicitor until completion.
It is not the same as the buyer's mortgage deposit. Many buyers use their mortgage deposit as the exchange deposit, which is why a buyer with a 5% mortgage deposit often has only 5% to put down at exchange.
For you, the exchange deposit is security. If the buyer fails to complete, your solicitor serves a notice to complete, which gives the buyer 10 working days. If they still do not complete, you can end the contract, keep the deposit and claim further losses.
Why is my buyer asking for 5%?
Usually because their savings went into their mortgage deposit. Bank of England figures published on 8 September 2026 show 8.4% of new mortgage lending in the second quarter went to buyers borrowing more than 90% of the property's value, the highest share since 2008.
A buyer on a 95% mortgage has 5% of the price in cash, and that is the figure they can offer at exchange. The request usually reflects how the buyer is funded, not how committed they are.
ValuQ calculation: a 10% versus a 5% exchange deposit at typical prices
| Sale price | 10% deposit | 5% deposit | Your security gap |
|---|---|---|---|
| £200,000 | £20,000 | £10,000 | £10,000 |
| £275,465 (UK average, Nationwide, August 2026) | £27,547 | £13,773 | £13,773 |
| £350,000 | £35,000 | £17,500 | £17,500 |
| £500,000 | £50,000 | £25,000 | £25,000 |
Is a 5% deposit a red flag?
Reading the request
| Usually normal | Worth a closer look |
|---|---|
| A first-time buyer on a 95% mortgage asks for 5% | A cash buyer asks for 5% with no reason given |
| The buyer has a formal mortgage offer and searches back | The buyer asks for a lower deposit and a long completion date together |
| The buyer agrees to stay liable for the full 10% if they default | The buyer refuses any clause keeping them liable for 10% |
| The request comes early, through the solicitors | The request arrives on the morning of exchange |
The deposit is your insurance against a buyer walking away after exchange. Taking less is fine. Taking less without the paperwork to back it is not.
How do I agree to 5% safely?
1. Ask why, through your agent or solicitor
A short, factual reason such as a 95% mortgage is a normal answer. Ask for it in writing so it sits on the file.
2. Check the buyer's commitment
Confirm the buyer has a formal mortgage offer, not a decision in principle, and that their searches are back. A buyer who has spent money on the purchase is a buyer less likely to walk away.
3. Keep the buyer liable for the full 10%
Ask your solicitor to draft the contract so that, if the buyer fails to complete, the balance up to 10% becomes payable. Legal commentators note that recovering that balance can still be hard in practice, so this is protection, not a guarantee.
4. Check your own purchase
If you are buying onward, your seller may expect 10% from you. Your buyer's deposit is often passed up the chain, so a 5% deposit coming in can leave a gap you have to fund. Ask your solicitor early.
5. Agree it in writing before exchange day
The change must be agreed in writing between the solicitors. Settling it a week out keeps exchange day calm and avoids a last-minute standoff.
6. Decide what matters more to you
Weigh the buyer's overall position against the security gap. A committed buyer with a mortgage offer and a 5% deposit is often a safer sale than a slower buyer offering 10%.
What if I say no?
You are entitled to insist on 10%. Some buyers will find the money from family; others cannot, and the sale may stall or fall away. Around one in four agreed sales already falls through, with TwentyEA recording a 23.7% rate in the first quarter of 2026, so refusing a reasonable request can create the very risk you were guarding against.
Timing matters too. Rightmove's July 2026 analysis put the average time from sale agreed to completion at 154 days. A buyer who has come that far and needs a smaller deposit is rarely the buyer about to disappear.
Common questions about a reduced exchange deposit
Do I have to accept a 5% deposit on exchange?
No. The standard contract terms set the deposit at 10% unless both sides agree otherwise in writing. It is your decision. Most sellers agree when the buyer's reason is clear and the contract keeps the buyer liable for the full 10% if they fail to complete.
What happens if my buyer pulls out after exchange with only 5% paid?
Your solicitor serves a notice to complete giving 10 working days. If the buyer still does not complete, you can end the contract, keep the 5% and claim further losses, including the balance up to 10% where the contract says so. Take legal advice at that point.
Who holds the exchange deposit?
Usually your solicitor, in a regulated client account kept separate from the firm's own money, until completion. In a chain it is often passed up to fund the deposit on your own purchase.
Can a buyer use a deposit guarantee instead of cash?
Some buyers offer a deposit guarantee or insurance product in place of part of the cash deposit. Whether it gives you adequate protection depends on its terms, so let your solicitor review it before you agree.
Will my own seller accept 5% from me?
Not necessarily. If your seller wants 10% and your buyer is paying 5%, you may need to fund the difference or ask your seller to accept less. Raise it early so it does not hold up a chain exchange.
ValuQ gives UK homeowners free, side-by-side property valuations from competing local estate agents. The seller who knows what their home is worth, and who is buying it, is the one who can say yes to a reasonable request without giving away their protection.
Sources
- [1]Bank of England, Mortgage Lenders and Administrators Statistics 2026 Q2 · 2026-09-08 · https://www.bankofengland.co.uk/statistics/mortgage-lenders-and-administrators/2026/2026-q2
- [2]Propelr, Exchange deposit explained for sellers · accessed 2026-09-18 · https://www.propelr.co.uk/guides/exchange-deposit-explained-for-sellers
- [3]Hayward Moon, What if a 10% deposit is not available on exchange of contracts? · accessed 2026-09-18 · https://www.haywardmoon.co.uk/blog/what-if-a-10-deposit-is-not-available-on-exchange-of-contracts/
- [4]Nationwide House Price Index, August 2026 · 2026-09-01 · https://www.nationwide.co.uk/media/hpi/
- [5]PropertyWire, Property fall-throughs decline to 23.7% in early 2026 (TwentyEA data) · 2026-04-16 · https://www.propertywire.com/news/property-fall-throughs-decline-to-23-7-in-early-2026/
- [6]PropertyWire, UK property transactions now take 216 days to complete (Rightmove analysis) · 2026-07-31 · https://www.propertywire.com/news/uk-property-transactions-now-take-216-days-to-complete/
Terms in this article
Plain-English definitions from the ValuQ property glossary.
Agreement in principle (AIP)
An agreement in principle is a lender's conditional indication of how much it would lend you, based on basic details and a credit check.
Exchange of contracts
Exchange of contracts is the moment a sale becomes legally binding, when the two signed contracts are formally swapped and the deposit is paid.
Notice to complete
A notice to complete is the formal demand served when one side misses the completion date, giving ten working days to complete before contracts can be terminated.
First-time buyer
A first-time buyer is someone who has never owned a property, here or abroad.
Exchange deposit
The exchange deposit is the sum, traditionally 10% of the price, paid by the buyer at exchange as security for completing.
Onward purchase
An onward purchase is the home a seller is buying with the proceeds of their sale, linking the two transactions.
Completion date
The completion date is the contractual day the sale must complete, fixed at exchange and binding on both sides.
Mortgage offer
A mortgage offer is the lender's formal, binding commitment to lend, issued after full underwriting and valuation.
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