First-Time Buyer Guide UK: Everything You Need to Know

Buying your first home in the UK involves more moving parts than most people realise. Deposits, solicitors, surveys, mortgage applications, government schemes, stamp duty — each piece connects to the others in ways that catch first-time buyers off guard. This guide covers the whole picture, from working out what you can afford all the way through to collecting your keys.

Your First Job: Work Out Your Budget

Before you browse Rightmove obsessively, understand what you can realistically borrow and afford. There are two different ceilings here, and both matter.

The Deposit Ceiling

Your deposit determines your loan-to-value (LTV) ratio, which drives which lenders will work with you and what interest rate you'll pay.

If you're buying a £250,000 property with a 10% deposit, you need £25,000 saved — before accounting for buying costs (solicitor fees, survey, mortgage arrangement fee, moving costs). Budget an additional £3,000–£6,000 on top of your deposit for these.

The Income Ceiling

Separately, lenders cap how much they'll let you borrow based on your income. The standard rule of thumb is 4 to 4.5 times your annual income. Some lenders go higher — up to 5.5 or even 6 times — for borrowers with strong profiles or certain professions. You can explore how payments scale with loan size using our repayment calculator.

Example:

• Combined income of £60,000
• At 4.5x: maximum mortgage of £270,000
• At 10% deposit: maximum property price of around £300,000

This is a guide figure. Actual affordability depends on your committed expenditure (debts, car finance, childcare), your credit history, and the specific lender's model. See the mortgage affordability explained guide for the full picture.

Stamp Duty Land Tax (SDLT) — The First-Time Buyer Relief

Stamp duty is one of the costs first-time buyers overlook until they're in the middle of a purchase. From April 2025, the relief thresholds changed:

So on a £350,000 purchase, you'd pay 5% on £50,000 = £2,500 in stamp duty, not the £7,500 that a non-first-time buyer would pay.

Important eligibility rules:

• Neither buyer can have previously owned a residential property (anywhere in the world)
• In a joint purchase, both buyers must be first-time buyers to claim the full relief
• If one buyer has owned before, standard SDLT rates apply to the whole purchase

First-Time Buyer Schemes

Lifetime ISA (LISA)

The Lifetime ISA is the most straightforward bonus available to first-time buyers who qualify. Key rules:

• Open between age 18 and 39
• Save up to £4,000 per year
• Government adds 25% — up to £1,000 per year
• Must be open for at least 12 months before using for a property purchase
• Property must cost £450,000 or less
• Must be your first residential property

The bonus arrives in your account, so it's available at exchange. If you save the maximum £4,000 per year for five years, the government contributes £5,000 on top of your £20,000. That's real money towards a deposit. If you have an existing Help to Buy ISA or LISA, read the full guide before deciding how to use it.

Shared Ownership

Shared ownership lets first-time buyers purchase between 10% and 75% of a property from a housing association, paying subsidised rent on the remainder. You get a mortgage only on the share you buy, which means:

• Smaller mortgage needed
• Smaller deposit required (based on the share, not the full price)
• You can "staircase" — buying more shares over time

Shared ownership is available in England, Wales, and Scotland, though the exact rules differ. Eligibility criteria apply — typically your household income must be below £80,000 (or £90,000 in London), and you must be unable to buy on the open market.

The scheme has limitations worth understanding: you pay rent on the part you don't own, some leases have restrictions, and service charges on flats can be significant. Read the full shared ownership guide before committing.

First Homes Scheme

First Homes is a government scheme offering new-build properties at a discount of at least 30% below market value. The discount is permanent — when you sell, the buyer must also buy at the discounted price. Eligibility criteria include:

• First-time buyers only
• Local connection requirement in many areas (local authority sets this)
• Income caps apply (currently £80,000, or £90,000 in London)
• Property price caps after discount (£250,000 in most of England, £420,000 in London)

The scheme gives meaningful access to new-build property for buyers priced out of the open market — but availability is limited and varies by area.

Mortgage Guarantee Scheme

This government scheme backed lenders offering 95% LTV mortgages, effectively reducing lender risk. It supported the availability of 5% deposit mortgages for properties up to £600,000. Check current government guidance for whether the scheme is still active at the time of your purchase, as it has operated in phases.

The Deposit: Saving Strategies and Accepted Sources

How Much Do You Actually Need?

Your deposit is the cash you contribute at purchase. As a percentage of the property price:

• 5%: the minimum for most mainstream lenders
• 10%: a meaningful step up in rates and lender choice
• 15–20%: strong position, especially for complex property types
• 25%+: access to the best rates on the market

Note that your deposit needs to be available at exchange — not just at completion. Your solicitor will ask for it when contracts are exchanged, which is the point of legal commitment.

Accepted Deposit Sources

Most lenders will accept:

• Personal savings (the clearest source)
• Gifts from family (requires a gifted deposit letter)
• Inheritance (with probate documentation)
• Proceeds from selling another property or significant assets

More complex sources — crypto proceeds, gambling winnings, overseas transfers — require specialist handling and full documentation. See the full deposit sources guide for detailed breakdowns by lender.

The Buying Cost Buffer

Don't drain your savings to the last penny on the deposit. Buying costs are real and unavoidable:

Getting a Mortgage: The Process

Step 1 — Check Your Credit Reports

Before any lender sees your application, see what they see. Pull all three credit reports (Experian, Equifax, TransUnion — via Experian app, ClearScore, and Credit Karma respectively) and check for errors, gaps, and anything unexpected. Even small errors can cause delays or declines.

Step 2 — Agreement in Principle (AIP)

Also called a Decision in Principle (DIP) or Mortgage in Principle (MIP). This is a conditional statement from a lender that they'd be willing to lend you approximately X amount. It's not a guarantee — the full application comes later — but estate agents expect to see one before accepting an offer.

Most AIPs involve a soft credit search that leaves no visible footprint on your report. A few lenders do a hard search at AIP stage — check before applying.

See the AIP vs DIP explained guide if you want to understand the terminology differences.

Step 3 — Find a Property and Make an Offer

With an AIP in hand, you can make serious offers. Once accepted, notify your mortgage broker or lender — the full application process starts here.

Step 4 — Full Mortgage Application

Your lender or broker will need:

• Three months' payslips
• Three months' bank statements
• P60 (most recent)
• Proof of deposit (savings statements, gifted deposit letter)
• ID and proof of address
• Proof of the property (estate agent details, property address)
• Self-employed: last 2 years' tax returns (SA302s) or accountant's certificate

Underwriters may ask for additional documents. Respond quickly — delays at this stage add weeks.

Step 5 — Instruct a Solicitor (Conveyancer)

Your solicitor runs the legal side: title searches, reviewing the contract, handling the deposit transfer, dealing with the Land Registry. Instruct them early — don't wait for a mortgage offer. Good conveyancers get booked up.

The seller's solicitor and your solicitor negotiate the contract, raise enquiries about the property, and handle the exchange and completion process.

Step 6 — Commission a Survey

Your mortgage lender will carry out a basic valuation for their own purposes (to check the property is worth what you're borrowing against). This is not a survey of the property's condition. For a serious assessment, commission your own:

• Homebuyer's Report (RICS Level 2): for standard properties in reasonable condition — highlights significant defects
• Building Survey (RICS Level 3): for older, larger, or unusual properties — detailed structural assessment
• Specific surveys: for known issues like damp, roofs, or structural movement

See the getting a structural survey guide for how to decide what level you need.

Step 7 — Mortgage Offer

Once underwriting is complete and the valuation is acceptable, you receive a formal mortgage offer. This document sets out the exact terms. Read it carefully — check the rate, term, any fees, and any conditions.

Mortgage offers typically last 3–6 months. If your purchase is delayed, contact your lender — extensions are often possible. See mortgage offer expired for what happens if it lapses.

Step 8 — Exchange of Contracts

Exchange is the legal moment of commitment. Both you and the seller sign identical contracts and your solicitor transfers your deposit (typically 10% of the purchase price) to the seller's solicitor. At this point, you're legally obligated to complete.

A completion date is agreed at exchange. The gap between exchange and completion is typically 1–4 weeks.

Step 9 — Completion

On completion day, your mortgage lender transfers the remaining funds, the seller moves out, and the keys are released to you. Your solicitor handles the Land Registry registration. You collect the keys and you're a homeowner.

How Long Does It Take?

From accepted offer to completion, typical timescales:

Chains (where your seller is buying elsewhere) can add months. Complicated properties, slow solicitors, or lender requests for more information extend timescales. Budget for a 3–5 month process; be pleasantly surprised if it's faster.

Common First-Time Buyer Mistakes

Underestimating Total Costs

The deposit is the headline number, but buying costs add up quickly. Solicitors, surveys, arrangement fees, removal vans — first-time buyers sometimes arrive at exchange having spent more than expected and finding themselves short. Budget for buying costs separately from your deposit.

Getting Mortgage Advice After Finding a Property

The AIP should come first, not after falling in love with a house. An accepted offer collapses badly if the mortgage doesn't stack up. Know your maximum budget before you start viewing seriously.

Applying for New Credit Before Completion

Every credit application leaves a mark on your file. If you take out a new car loan or open a credit card between mortgage application and completion, your lender may re-run checks and change the terms or withdraw the offer. Don't apply for new credit until after your keys are in your hand.

Ignoring Leasehold Complications

A flat purchase is almost always leasehold. Leasehold comes with service charges, ground rent (now restricted by law for new leases), and a lease that needs enough years left to be mortgageable — typically 85+ years. Short leases and high service charges have derailed many first-time buyer purchases. Read the leasehold scandal explained guide before buying a flat.

Not Using a Broker

The mortgage market has hundreds of products. Your high street bank only shows you their own. A whole-of-market broker can access the full range — and for complex situations (self-employment, adverse credit, unusual property types) this difference is significant. Many brokers charge no fees to the borrower, taking commission from lenders instead. See how mortgage brokers get paid for how the model works.

Skipping the Survey

The lender's valuation protects the lender, not you. Expensive structural defects — subsidence, damp, roofing issues — are not the lender's concern. They're yours. A £500 survey can save tens of thousands in unexpected repair bills, or give you the information to renegotiate the price.

Buying with Someone Else

Most first-time buyers buy jointly with a partner. A few points worth knowing:

Joint tenants vs tenants in common: Joint tenants each own the whole property together (if one dies, the other inherits automatically). Tenants in common own defined shares (e.g., 60/40) and can leave their share to anyone in a will. Couples typically use joint tenants; buyers in unequal financial situations often use tenants in common.

Both incomes count: A joint application allows both incomes to be used for affordability purposes — increasing what you can borrow.

Both credit histories count: The weaker credit profile can drag the application down. If one applicant has adverse credit, read the first-time buyer with bad credit guide to understand your options.

Buying with a friend or relative: Possible, but think through the exit strategy. What happens if one person wants to sell and the other doesn't? Deed of trust or tenants in common agreement with a cohabitation agreement is wise.

Protecting Your Purchase

Once you have a mortgage, consider:

• Life insurance / decreasing term assurance: pays off your mortgage if you die — many lenders recommend this
• Critical illness cover: pays a lump sum if you're diagnosed with a serious illness
• Income protection: replaces your income if you're unable to work long-term
• Buildings insurance: your lender requires this from exchange — contents insurance is optional but sensible

These aren't compulsory, but an unprotected mortgage on a single income is a significant financial risk.

A Realistic Timeline to Your First Home

Now:

• Pull all three credit reports and fix any errors
• Open a Lifetime ISA if you're under 40
• Calculate your maximum budget (deposit + income multiple)

0–6 months:

• Save consistently — lenders like to see a savings pattern
• Reduce outstanding debts where possible
• Research areas that work within your budget

6–12 months:

• Get an Agreement in Principle
• Start viewing properties
• Instruct a solicitor early so they're ready when needed

At offer:

• Full mortgage application via a whole-of-market broker
• Commission a survey appropriate to the property
• Work closely with your solicitor to keep the process moving

---

This is educational content, not financial advice. Your situation is unique — speak to a qualified mortgage broker before making any decisions.