Buying your first home is one of the biggest financial decisions you will ever make. The process can feel overwhelming — there are unfamiliar terms, hidden costs, multiple professionals involved, and a timeline that can stretch over many months. But with the right knowledge and preparation, it is entirely manageable.
This guide walks you through every stage of the first-time buyer journey in the UK, from building your deposit and understanding government support to choosing the right mortgage, navigating the legal process, and finally getting the keys to your new home. Whether you are just starting to think about buying or you are ready to make an offer, this guide has you covered.
Contents
- Preparing Your Finances
- Building Your Deposit
- Government Schemes for First-Time Buyers
- Stamp Duty Relief
- Mortgage Types Explained
- Getting a Mortgage Agreement in Principle
- Finding the Right Property
- The Mortgage Application
- The Legal Process (Conveyancing)
- Exchange and Completion
- Total Costs Breakdown
- Common Mistakes to Avoid
- Frequently Asked Questions
Step 1 Preparing Your Finances
The foundation of a successful property purchase is financial preparation. Ideally, you should start preparing 6 to 12 months before you plan to apply for a mortgage. This gives you time to build your deposit, improve your credit score, and reduce any debts.
Check Your Credit Score
Your credit score is one of the most important factors in your mortgage application. It determines not just whether you are approved, but which interest rates you qualify for — and the difference between a good and average rate can amount to tens of thousands of pounds over the mortgage term.
Check your credit reports with all three UK agencies: Experian, Equifax, and TransUnion. You can do this for free using services like ClearScore (Equifax), Credit Karma (TransUnion), and Experian's free tier. Look for any errors, unknown accounts, or missed payments and dispute anything inaccurate.
Key actions to improve your credit score:
- Register on the electoral roll at your current address
- Keep credit card utilisation below 30% of your limit
- Make all payments on time — set up direct debits to avoid missed payments
- Avoid applying for new credit for at least 6 months before your mortgage application
- Close unused credit accounts (but keep your oldest account open)
- Check for and correct any errors on your credit file
For a detailed guide, see our complete credit score improvement guide.
Reduce Existing Debts
Every pound of monthly debt repayment reduces how much you can borrow. Lenders calculate your debt-to-income ratio and factor in all existing commitments: credit cards, personal loans, car finance, student loans, and even buy-now-pay-later agreements. Paying off debts before applying significantly increases your borrowing capacity.
As a rough guide, each £100 of monthly debt repayments reduces your maximum borrowing by approximately £5,000 to £6,000. If you have £300 per month in debt repayments, clearing those debts could increase your mortgage by £15,000 to £18,000.
Step 2 Building Your Deposit
Your deposit is the amount you pay upfront towards the property price. The rest is covered by your mortgage. The size of your deposit affects three things: whether you can get a mortgage at all, the interest rate you are offered, and your monthly payments.
| Deposit | LTV | Typical Rate (2yr fixed) | On £250,000 Property |
|---|---|---|---|
| 5% | 95% | ~5.4% | £12,500 deposit |
| 10% | 90% | ~4.8% | £25,000 deposit |
| 15% | 85% | ~4.5% | £37,500 deposit |
| 20% | 80% | ~4.2% | £50,000 deposit |
The minimum deposit accepted by most lenders is 5%. However, aiming for 10% is strongly recommended — it unlocks significantly better interest rates and a wider range of mortgage products. If you can reach 15% or 20%, you will access the best rates available.
Where Your Deposit Can Come From
- Personal savings — the most straightforward source; lenders want to see consistent saving over time
- Lifetime ISA bonus — up to £1,000 free per year from the government (see below)
- Gifted deposit from family — acceptable with a signed gift letter confirming it is not a loan
- Inheritance — with probate documentation
- Sale of assets — such as investments or a vehicle, with documentation
For a comprehensive guide to deposit sources and requirements, see our deposit guide.
Step 3 Government Schemes for First-Time Buyers
The UK government offers several schemes designed to help first-time buyers get on the property ladder. Understanding which you are eligible for can save you thousands or make a purchase possible that otherwise would not be.
Lifetime ISA (LISA)
The Lifetime ISA is the single best savings vehicle for first-time buyers. You can save up to £4,000 per year and the government adds a 25% bonus — that is up to £1,000 of free money every year. Over 4 years of maximum contributions, you would have £20,000 (including £4,000 in bonuses), plus any investment growth.
There are two types of LISA: a cash LISA (like a savings account) and a stocks and shares LISA (invested in the market). If you plan to buy within 2 to 3 years, a cash LISA is safer. If your timeline is longer, a stocks and shares LISA may offer better returns.
Critical rule: The LISA must be open for at least 12 months before you can use it to buy a property. Open one immediately, even if you only deposit £1, to start the clock.
Shared Ownership
Shared Ownership allows you to buy a share of a property (between 25% and 75%) and pay rent on the remainder. You only need a mortgage and deposit for the share you are buying, making it possible to buy in areas where full ownership is unaffordable.
Over time, you can buy additional shares (called "staircasing") until you own the property outright. The rent on the unowned share is typically around 2.75% of its value per year.
Example: A £300,000 property at 50% share means you buy £150,000 (needing a £150,000 mortgage and £7,500 to £15,000 deposit) and pay approximately £344 per month in rent on the other £150,000.
First Homes Scheme
First Homes are new-build properties sold to first-time buyers at a discount of at least 30% (and sometimes up to 50%) compared to their market value. The discount is passed on to future buyers, keeping the homes affordable in perpetuity.
Local councils can set additional eligibility criteria, such as a local connection requirement or an income cap lower than the national threshold. The discounted price must be no more than £250,000 (£420,000 in London).
Mortgage Guarantee Scheme
This government-backed scheme encourages lenders to offer 95% LTV mortgages by providing a guarantee against losses. It means more lenders offer 5% deposit mortgages, giving you more choice and potentially better rates than without the scheme.
You do not apply for the scheme directly — you simply apply for a 95% LTV mortgage with a participating lender. The scheme runs until June 2025 but may be extended; check for the latest position.
For full details on all available schemes, see our government schemes guide.
Step 4 Stamp Duty Relief for First-Time Buyers
First-time buyers in England and Northern Ireland benefit from significant stamp duty relief. As of 2026, the rates are:
| Property Price | SDLT Rate for First-Time Buyers | Standard Rate (for comparison) |
|---|---|---|
| Up to £300,000 | 0% | 0% (up to £125K) then 2% |
| £300,001 to £500,000 | 5% (on amount above £300K) | 5% |
| Above £500,000 | Relief not available — standard rates apply | 10% / 12% / 15% |
- £275,000 property: first-time buyer pays £0 (standard buyer would pay £1,250)
- £350,000 property: first-time buyer pays £2,500 (standard buyer would pay £7,500)
- £450,000 property: first-time buyer pays £7,500 (standard buyer would pay £12,500)
To qualify for first-time buyer relief, neither you nor anyone you are buying with can have previously owned a residential property anywhere in the world. This includes inherited property and property owned abroad. Your solicitor will apply the relief on your SDLT return.
For a detailed breakdown and interactive calculator, see our stamp duty calculator.
Step 5 Mortgage Types Explained
Understanding the different types of mortgage is essential for choosing the right product. Here are the main options:
Fixed Rate Mortgage
Your interest rate is locked in for a set period, typically 2, 3, 5, or 10 years. Your monthly payments stay the same regardless of what happens to the Bank of England base rate. This gives you certainty and makes budgeting straightforward. When the fixed period ends, you revert to the lender's standard variable rate (SVR), which is usually much higher — so most people remortgage to a new fixed deal at that point.
Current rates (early 2026): 2-year fixed ~4.5%, 5-year fixed ~4.2%.
Variable Rate Mortgage
Your interest rate can change, which means your monthly payments can go up or down. There are several sub-types:
- Tracker mortgage — tracks the Bank of England base rate by a set margin (e.g., base rate + 0.75%). When the base rate moves, your rate moves by the same amount. Current tracker rates are around 4.0%.
- Discount mortgage — set at a discount to the lender's SVR for a fixed period. If the SVR is 7.5% and the discount is 2.5%, your rate is 5.0%. But the SVR can change at any time at the lender's discretion.
- Standard variable rate (SVR) — the lender's default rate, typically 7 to 8%. You should never be on the SVR by choice — always remortgage before your deal expires.
Repayment vs Interest-Only
A repayment mortgage means you pay both interest and capital each month, so the loan is fully paid off by the end of the term. This is the standard choice for most residential buyers.
An interest-only mortgage means you only pay the interest — the loan balance does not reduce, and you must have a plan to repay it at the end. Interest-only is harder to qualify for and is mainly used by buy-to-let investors.
Step 6 Getting a Mortgage Agreement in Principle
A mortgage Agreement in Principle (AIP), also known as a Decision in Principle (DIP), is a statement from a lender confirming how much they are willing to lend you, subject to a full application. It is not a guarantee, but it serves two important purposes:
- It tells you your budget. Knowing your maximum borrowing (plus your deposit) gives you a realistic price range for your property search.
- It shows sellers you are serious. Estate agents and sellers are more likely to accept your offer if you can show you already have borrowing approval in place.
Most lenders can issue an AIP within 24 hours based on a soft credit check (which does not affect your credit score). An AIP is typically valid for 60 to 90 days and can usually be renewed.
You can get an AIP from a bank, building society, or through a mortgage broker. A broker is often the best option, as they can search the whole market and identify the lender most likely to offer the best terms for your circumstances.
Step 7 Finding the Right Property
Armed with your AIP and a clear budget, you can start searching for properties with confidence. Here is how to approach the search:
Where to Search
The main property portals in the UK are Rightmove, Zoopla, and OnTheMarket. Set up saved searches and email alerts so you are notified as soon as new properties matching your criteria are listed. Speed matters — desirable properties can go under offer within days.
What to Look For at Viewings
- Signs of damp: Peeling wallpaper, musty smells, dark spots on walls or ceilings, condensation on windows
- Structural issues: Large cracks (especially diagonal ones), uneven floors, sticking doors, signs of subsidence
- Roof condition: Missing tiles, sagging ridgeline, blocked gutters
- Electrics and plumbing: Age of the boiler, condition of wiring (old round-pin sockets are a warning sign), water pressure
- Windows: Double glazing condition, any misted units (indicating seal failure)
- External: Neighbourhood condition, parking, proximity to busy roads, flight paths, or industrial sites
Making an Offer
Your offer does not have to match the asking price. Research what similar properties in the area have actually sold for using the Land Registry's price paid data or Rightmove's sold prices feature. Consider the property's condition, how long it has been listed, and current market conditions.
As a first-time buyer, you have a strong negotiating position because you are chain-free — there is no property you need to sell first, which removes a major source of delay and risk for the seller.
Step 8 The Mortgage Application
Once your offer is accepted, you need to convert your AIP into a full mortgage application. This involves providing detailed documentation and going through the lender's full underwriting process.
Documents You Will Need
- 3 months' payslips (employed) or 2 to 3 years' accounts/SA302s (self-employed)
- 3 months' bank statements for all accounts
- P60 or tax return
- Proof of deposit (savings statements, gift letter, etc.)
- Photo ID (passport or driving licence)
- Proof of address (utility bill or council tax statement)
- Details of existing debts and financial commitments
- Employment contract or confirmation of employment letter
The Valuation
The lender will instruct a surveyor to value the property, confirming it is worth what you are paying. This is for the lender's protection, not yours. The valuation typically costs £150 to £400, though some mortgage products include a free valuation.
Getting Your Own Survey
Separately from the lender's valuation, you should strongly consider commissioning your own survey. A HomeBuyer Report (£250 to £400) covers the main areas of concern, while a Full Building Survey (£400 to £700) is more thorough and recommended for older or unusual properties. A survey can uncover problems that would cost thousands to fix, giving you the option to renegotiate the price or withdraw before you are legally committed.
Step 9 The Legal Process (Conveyancing)
Conveyancing is the legal process of transferring property ownership from the seller to you. You will need to instruct a solicitor or licensed conveyancer to handle this. The process typically takes 8 to 12 weeks and is often the main cause of delays.
What Your Solicitor Does
- Conducts property searches — local authority, environmental, water and drainage, land registry checks. These reveal planning issues, flood risk, contamination, rights of way, and other potential problems (£250 to £400)
- Reviews the contract — checks the terms of sale, any restrictive covenants, and the title deeds
- Raises enquiries — asks the seller's solicitor questions about the property (planning permissions, guarantees, boundaries, etc.)
- Reviews your mortgage offer — ensures the terms are satisfactory and any special conditions are met
- Handles the transfer of funds — manages the flow of money between all parties at completion
- Registers the property — files your ownership with the Land Registry after completion
- Pays stamp duty — files and pays your SDLT return to HMRC
Expect to pay £850 to £1,500 in solicitor fees plus £250 to £400 in search disbursements. Get quotes from at least three firms and check they are on your mortgage lender's approved panel.
Step 10 Exchange and Completion
Exchange of Contracts
Exchange is the point at which the purchase becomes legally binding. Your solicitor and the seller's solicitor exchange signed contracts, and you pay the agreed deposit (usually 10% of the purchase price). From this moment, both parties are legally committed — if you pull out, you lose your deposit; if the seller pulls out, you can sue for breach of contract.
Completion
Completion is the day the property becomes yours. Your lender sends the mortgage funds to your solicitor, who sends the full purchase price to the seller's solicitor. Once the money arrives and is confirmed, the keys are released to you. This usually happens by early afternoon.
Completion typically occurs 1 to 4 weeks after exchange, though same-day exchange and completion is possible (and increasingly common for first-time buyers without a chain).
What to Do on Completion Day
- Collect the keys from the estate agent
- Take meter readings for gas, electricity, and water
- Change the locks (recommended for security)
- Set up utility accounts in your name
- Register for council tax
- Redirect your post via Royal Mail
- Confirm your buildings insurance is active (should start from exchange)
Reference Total Costs Breakdown
The deposit is just one of several costs involved in buying a property. Here is a realistic breakdown of the total upfront costs for a £300,000 property purchased by a first-time buyer:
| Cost | Typical Range | Notes |
|---|---|---|
| Deposit (10%) | £30,000 | 5% minimum; 10% recommended |
| Stamp duty | £0 | First-time buyer relief: £0 on properties up to £300K |
| Solicitor/conveyancer fees | £1,000–£1,500 | Including VAT |
| Property searches | £250–£400 | Disbursements paid via solicitor |
| Survey (HomeBuyer Report) | £250–£400 | Optional but strongly recommended |
| Mortgage arrangement fee | £0–£2,000 | Can sometimes be added to mortgage |
| Valuation fee | £0–£400 | Often free with the mortgage product |
| Mortgage broker fee | £0–£500 | Some brokers are paid by the lender |
| Buildings insurance | £100–£300 | Annual; required from exchange |
| Removal costs | £200–£1,500 | Depends on volume and distance |
| Total (excluding deposit) | £2,000–£6,500 | |
| Total (including 10% deposit) | £32,000–£36,500 |
Common Mistakes to Avoid
First-time buyers commonly make the following mistakes. Avoiding them will save you time, money, and stress:
- Not checking your credit report early enough. Errors and issues take time to fix. Start at least 6 months before you plan to apply.
- Skipping the survey. A £300 survey can reveal problems that cost £10,000+ to fix. It is the best insurance you can buy during the process.
- Stretching to your absolute maximum budget. Just because a lender will give you a certain amount does not mean you should borrow it all. Leave a buffer for interest rate rises, unexpected costs, and lifestyle.
- Forgetting about additional costs. The deposit is not the only expense. Budget for solicitor fees, searches, surveys, moving costs, and furnishing.
- Not opening a Lifetime ISA early. The 12-month minimum holding period catches many people out. Open one today, even with just £1.
- Falling in love with one property. Emotional attachment leads to overpaying and overlooking problems. Always be prepared to walk away.
- Not remortgaging when the fixed rate ends. Falling onto the SVR (typically 7 to 8%) from a fixed rate of 4 to 5% can increase monthly payments by hundreds of pounds. Set a reminder 3 to 6 months before your deal expires.
- Applying for credit during the mortgage process. Any new credit applications between your AIP and completion can derail your mortgage approval. Do not buy furniture on finance, take out a new credit card, or finance a car until after you have completed.
- Not comparing solicitors. Fees vary significantly. Get at least three quotes and check reviews. The cheapest is not always the best — poor communication from a solicitor is one of the biggest causes of frustration in the process.
- Ignoring the running costs. Factor in council tax, utility bills, buildings and contents insurance, maintenance, and (if applicable) service charges and ground rent before committing to a purchase price.
Frequently Asked Questions
How much deposit do first-time buyers need in 2026?
The minimum is 5% of the property price with most lenders. However, a 10% deposit significantly improves the rates available to you. On a £250,000 property, that means saving between £12,500 (5%) and £25,000 (10%). The Lifetime ISA provides a 25% government bonus of up to £1,000 per year to help boost your savings.
Do first-time buyers pay stamp duty in 2026?
First-time buyers in England and Northern Ireland pay no stamp duty on properties up to £300,000. For properties between £300,001 and £500,000, they pay 5% only on the amount above £300,000. Properties over £500,000 do not qualify for first-time buyer relief. Use our stamp duty calculator for your specific situation.
What government schemes are available for first-time buyers?
Key schemes include the Lifetime ISA (25% bonus on savings up to £4,000/year), Shared Ownership (buy a share and rent the rest), First Homes (30 to 50% discount on new builds), and the Mortgage Guarantee Scheme (enabling 5% deposit mortgages). See our government schemes guide for full details.
How much can a first-time buyer borrow?
Most lenders offer 4 to 4.5 times your annual household income. A single buyer earning £35,000 could borrow between £140,000 and £157,500. A couple earning £35,000 each could borrow between £280,000 and £315,000. Use our affordability calculator for a personalised estimate.
What are the steps to buying a first home?
The main steps are: prepare your finances and save a deposit, get a mortgage AIP, search for properties and make an offer, submit your full mortgage application, instruct a solicitor for conveyancing, exchange contracts, and complete the purchase. The whole process typically takes 4 to 8 months.
Should I use a mortgage broker?
A mortgage broker is highly recommended for first-time buyers. They search the whole market, handle paperwork, and guide you through the process. The fee (if any) is typically £300 to £500, but the better rate they find can save you thousands over the mortgage term.
What is a Lifetime ISA and how does it work?
The LISA is a savings account for people aged 18 to 39. Save up to £4,000 per year and the government adds a 25% bonus (up to £1,000 per year). The property must cost £450,000 or less, and the LISA must be open for at least 12 months before use. Open one immediately to start the clock, even with a £1 deposit.
Related Guides
- First-Time Buyer Checklist — tick off every step as you go
- Mortgage Calculator — calculate your monthly repayments
- Stamp Duty Calculator — calculate SDLT on your property
- How Much Can I Borrow? — affordability calculator
- Deposit Guide — deposit requirements and sources
- Credit Score Guide — boost your application strength
- Government Schemes 2026 — all available support programmes
- Mortgage Application Guide — the full application process
- Fixed vs Variable Rates — choose the right mortgage type
- Fees Explained — every cost involved in buying