Buying your first home is one of the most significant financial decisions you will ever make, and it is also one of the most complicated. The process involves mortgage advisers, solicitors, surveyors, estate agents, and HMRC, all working on different timelines with different priorities, and nobody gives you a manual at the start. This guide is that manual. It covers every stage from saving your deposit to moving in, with honest numbers and no assumption that you already know the jargon.
Are you actually a first-time buyer?
The definition matters because it affects your stamp duty, your eligibility for government schemes, and how lenders assess your application. HMRC defines a first-time buyer as someone who has never previously owned a freehold or leasehold interest in a residential property anywhere in the world. The definition is strict and applies regardless of how you came to own the property. If you inherited a home, were gifted one, or owned a property abroad at any point, you are not a first-time buyer for stamp duty purposes, even if you sold it years ago and have been renting since.
If you are buying jointly, both purchasers must qualify as first-time buyers for the relief to apply. If your partner or co-buyer has ever owned property, neither of you qualifies, and you pay standard rates on the full purchase price. This catches many couples by surprise, particularly where one partner owned a home in a previous relationship.
Inherited property: If you have inherited a property, even if you sold it immediately and never lived there, you have lost first-time buyer status permanently. Inheriting a property and selling it before buying does not restore your eligibility. HMRC can audit first-time buyer stamp duty claims within 12 months of filing. False claims attract penalties and interest.
How much can you borrow?
Before you start viewing properties, you need a realistic figure for how much a lender will offer you. Most mainstream lenders apply an income multiple of around 4 to 4.5 times your annual gross salary. On a £40,000 salary, that typically means a maximum mortgage of around £160,000 to £180,000. Some lenders will stretch to 5 times salary for buyers with strong credit profiles and higher incomes, and a handful offer up to 5.5 times in specific circumstances.
Lenders also apply an affordability stress test, checking that you could still afford the repayments if interest rates rose significantly above your current product rate. This can result in a lower maximum than the income multiple alone suggests, particularly if you have significant existing debt, car finance, or other financial commitments.
| Annual gross income | At 4x multiple | At 4.5x multiple | At 5x multiple |
|---|---|---|---|
| £30,000 | £120,000 | £135,000 | £150,000 |
| £40,000 | £160,000 | £180,000 | £200,000 |
| £55,000 | £220,000 | £247,500 | £275,000 |
| £70,000 | £280,000 | £315,000 | £350,000 |
| £90,000 (joint) | £360,000 | £405,000 | £450,000 |
These figures assume a clean credit history. County court judgements, missed payments, high credit card utilisation, or being in a debt management plan will all reduce what lenders will offer, and some lenders will decline outright. Before applying for a mortgage, check your credit file with all three major agencies (Experian, Equifax, and TransUnion) and correct any errors. This costs nothing and can significantly affect your options.
Get a Decision in Principle first: Before you start viewing properties seriously, ask a mortgage adviser to run your figures and obtain a Decision in Principle (DIP) from a lender. This is a conditional indication of how much they would lend you, based on a soft credit check that does not affect your credit score. Estate agents expect to see one before accepting offers in most markets.
How much deposit do you need?
The minimum deposit for most residential mortgages is 5% of the purchase price, though some lenders will accept less through specific schemes. A 5% deposit on a £250,000 property is £12,500. The remaining 95% is your mortgage, this is called a 95% loan-to-value (LTV) mortgage.
A larger deposit unlocks materially better mortgage rates and lower monthly payments. The rate improvement between a 5% and 10% deposit is typically more significant than the jump from 10% to 15%. If you are close to the 10% threshold, it is usually worth waiting slightly longer to save the extra rather than rushing in at 95% LTV and paying a higher rate for the entire fixed period.
| Deposit size | LTV | Typical 5yr fixed rate | Monthly payment (£200k mortgage) |
|---|---|---|---|
| 5% | 95% | ~5.0% to 5.5% | ~£1,170 to £1,227 |
| 10% | 90% | ~4.3% to 4.8% | ~£1,090 to £1,143 |
| 15% | 85% | ~4.0% to 4.5% | ~£1,052 to £1,107 |
| 25% | 75% | ~3.8% to 4.2% | ~£1,027 to £1,073 |
Your deposit does not need to come entirely from your own savings. Gifted deposits from family are accepted by most lenders, provided the donor signs a letter confirming it is a gift and not a loan. Some lenders also accept a combination of savings and government scheme bonuses (such as a Lifetime ISA) as your deposit. What counts as an acceptable deposit varies by lender, so ask your adviser to confirm.
Gifted deposits: the rules lenders apply
A gifted deposit is one of the most common ways first-time buyers bridge a savings gap, but lenders apply specific requirements before they will accept one. The donor must provide a signed gift letter confirming the amount, that it is a genuine gift with no expectation of repayment, and that the donor has no interest in the property. Most lenders will also ask for bank statements from the donor showing the funds in their account, and some will ask for the donor's identification documents as part of anti-money laundering checks.
Lenders distinguish carefully between a gift and a loan. If you have any informal agreement to repay the money, even to a parent, that arrangement must be disclosed. An undisclosed loan treated as a gift is mortgage fraud. Some lenders also restrict who can gift the deposit: most accept parents, siblings, or grandparents, but are less comfortable with gifts from friends or more distant relatives. Check the specific lender's policy with your broker before relying on a gift from outside your immediate family.
Gift letter timing: The gift letter must be dated close to the point of application and must reflect the actual amount being gifted. A letter written months earlier is sometimes rejected. Keep the donor available to provide documentation quickly once a mortgage application is in progress.
Using overseas funds as your deposit
If you have savings held in a bank account abroad, proceeds from selling a property overseas, or funds transferred from a foreign source, you can use these towards your UK deposit in most cases, but they attract significantly more scrutiny than UK-held savings. Anti-money laundering regulations require lenders and solicitors to satisfy themselves about the source and legitimacy of all funds used in a property purchase, and overseas funds are harder to verify quickly.
Your solicitor will require a clear paper trail showing the origin of the money. For savings, this typically means bank statements for at least 3 to 6 months, translated into English if they are not already, and sometimes notarised. For funds from selling a foreign property, you will need evidence of the sale, the completion statement, and the transfer history from that sale to your current account. If the money was gifted to you from a family member abroad, the same gift letter requirements apply as for a UK donor, plus additional source-of-wealth evidence for the donor themselves.
Note that if you previously owned a property abroad and sold it to fund your UK purchase, this does not affect the funds you can use, but it does affect your first-time buyer status. Selling a property you owned overseas does not restore first-time buyer eligibility for stamp duty or government scheme purposes.
Currency conversion is a further practical consideration. If your funds are held in a foreign currency, exchange rate movements between the point you plan to transfer and the point your solicitor actually receives the funds can affect the total received. For large sums, a specialist foreign exchange broker will typically offer significantly better rates than a high street bank, and some allow you to lock in a rate in advance using a forward contract. Allow extra time for international transfers, which can take several days to clear and may trigger additional compliance checks that delay the arrival of funds.
Allow extra time for overseas funds: International transfers, source-of-funds verification, and currency conversion all take longer than domestic fund movements. If a significant portion of your deposit is coming from overseas, tell your solicitor at the outset, not in the week before exchange. Late or delayed funds are one of the more avoidable causes of exchange day complications.
Stamp duty for first-time buyers
Stamp Duty Land Tax (SDLT) is a government tax on property purchases in England and Northern Ireland. Scotland and Wales operate separate systems with different rates. As a first-time buyer, you benefit from a significant reduction in SDLT compared to standard buyers, provided the property costs £500,000 or less.
| Property price | First-time buyer SDLT | Standard buyer SDLT | Your saving |
|---|---|---|---|
| £200,000 | £0 | £1,500 | £1,500 |
| £300,000 | £0 | £5,000 | £5,000 |
| £400,000 | £5,000 | £10,000 | £5,000 |
| £500,000 | £10,000 | £15,000 | £5,000 |
| £500,001+ | Standard rates apply in full | Standard rates apply | £0 |
The £500,000 cliff edge: If you pay £500,001 for a property, you lose first-time buyer relief entirely and pay standard rates on the full purchase price, a sudden jump from £10,000 to over £15,000 in SDLT. This is not a gradual reduction; it is a hard cut-off. If you are considering a property priced just above £500,000, negotiate hard to get under that threshold or factor the extra SDLT into your offer.
First-time buyer SDLT relief is not applied automatically. Your solicitor claims it on your behalf when submitting the SDLT return to HMRC after completion. Make sure you tell your solicitor you are a first-time buyer from the outset and provide confirmation if asked. The relief applies in England and Northern Ireland only. In Scotland, first-time buyers benefit from a slightly higher Land and Buildings Transaction Tax nil-rate threshold of £175,000. In Wales, there is no first-time buyer relief under Land Transaction Tax.
Government schemes for first-time buyers in 2026
Several government-backed schemes are designed to help first-time buyers overcome the two biggest barriers: saving the deposit and qualifying for a large enough mortgage. Help to Buy Equity Loan is fully closed and no longer available in England. The schemes that remain active in 2026 are as follows.
Save up to £4,000 per year and receive a 25% government bonus (up to £1,000 per year). Must open aged 18 to 39. Property must cost £450,000 or less. A 25% penalty applies on non-qualifying withdrawals.
Now permanent (renamed Freedom to Buy from July 2025). Buy with a 5% deposit on properties up to £600,000. Government guarantees a portion of the lender's risk. Available to first-time buyers and home movers.
Buy a share of 10% to 75% and pay rent on the remainder to a housing association. Household income cap: £80,000 (£90,000 in London). You can increase your share over time through staircasing. Properties are leasehold.
30% to 50% discount on selected new-build homes. Property must cost £250,000 or less after discount (£420,000 in London). Income cap £80,000 (£90,000 London). Discount is permanent and passes to future buyers. Patchy availability.
Lifetime ISA: the detail that matters
The Lifetime ISA is the single most powerful savings tool available to most first-time buyers. Over four years of maximum contributions (£4,000 per year), you would have saved £16,000 of your own money and received £4,000 in government bonuses, giving you £20,000 towards your deposit before any interest or investment returns. If two buyers both hold LISAs, both bonuses can be used on the same purchase.
The key constraints to understand are that the LISA can only be used on a property costing £450,000 or less, and you must have held the account for at least 12 months before using it to buy. The 25% withdrawal penalty on non-qualifying withdrawals is steeper than it sounds: if you withdraw £10,000 for any other purpose, you pay a £2,500 penalty, which recovers the government bonus and also takes a small slice of your own savings. Never treat a LISA as accessible emergency money.
LISA price cap in expensive areas: The £450,000 property price cap has not risen since the LISA was introduced, while property prices have. In many parts of London and the South East, a LISA is effectively unusable as the property prices in the target area exceed the cap. Check whether the cap is a constraint for your target area before opening one.
Shared Ownership: the full picture
Shared Ownership is widely advertised as an accessible route to homeownership, and for the right buyer in the right location it genuinely is. But it comes with complexity that is not always prominently explained. You are buying a leasehold interest in a property, which means ground rent and service charges apply alongside your mortgage and rent payments. You need to budget for all three costs every month, and the total can exceed what full ownership of a comparable property would cost in some cases.
Selling a Shared Ownership property is also more complex than a standard sale. The housing association typically has a nomination period of 4 to 8 weeks during which they can find their own buyer, before you can sell on the open market. If you have not yet staircased to 100%, your pool of buyers is limited to those who qualify for Shared Ownership. Read the full details of the specific lease, including the ground rent structure and any restrictions, before exchanging contracts.
The full cost of buying: what to budget beyond the deposit
The deposit is the largest upfront cost but far from the only one. Many first-time buyers arrive at completion having underestimated the total cash required and face a stressful shortfall. Budget for all of the following before you make your first offer.
| Cost | Typical range | Notes |
|---|---|---|
| Stamp duty | £0 to £10,000 (FTB relief) | Zero on properties up to £300k; see table above |
| Solicitor / conveyancer fees | £1,200 to £2,500 | Higher for leasehold; shop around for fixed-fee quotes |
| Mortgage arrangement fee | £0 to £2,000 | Can often be added to the mortgage, but this increases long-term cost |
| Mortgage broker fee | £0 to £500 | Many whole-of-market brokers charge no fee to buyers |
| Survey | £400 to £1,500 | RICS Level 2 (Homebuyer) or Level 3 (Building Survey); always commission one |
| Buildings insurance | £150 to £400 pa | Required from exchange of contracts; included in service charge for leasehold flats |
| Moving costs | £500 to £2,500 | Depends on volume and distance; get three quotes |
| Land Registry fee | £30 to £910 | Scaled by purchase price; your solicitor arranges this |
| Search fees | £250 to £400 | Local authority, water, environmental, and drainage searches |
| Immediate repairs | £0 to £5,000+ | Boiler service, re-keying locks, fixing survey-flagged issues; budget a contingency even on clean surveys |
| Furniture and appliances | £2,000 to £8,000+ | Unfurnished properties need beds, sofas, white goods, and window coverings from day one; costs escalate quickly for larger homes |
| Decorating and DIY | £500 to £3,000+ | Paint, flooring, fixtures — even cosmetically good properties usually need some work to feel like your own |
As a rough planning figure, budget for 3 to 5% of the purchase price in additional costs above the deposit. On a £280,000 property, that means roughly £8,400 to £14,000 in fees, taxes, and moving costs on top of your deposit. The lower end of that range assumes low or no stamp duty (which is realistic for most first-time buyers below £300,000) and a relatively simple property. Leasehold flats and higher-priced properties will sit towards the upper end.
Furniture, repairs, and decorating sit on top of that 3 to 5% figure and are easy to underestimate. An unfurnished two-bedroom property can realistically require £5,000 to £10,000 to make properly liveable if you are starting from scratch, particularly if the property needs a boiler service, new locks, or any work flagged by your survey. Build a separate post-move budget for these costs and treat it as fixed expenditure, not a discretionary extra.
Finding the right property: what to check before you offer
The excitement of finding a property you like makes it tempting to rush an offer. Slow down first. There are a number of checks that cost nothing upfront but can save you from significant problems after exchange, the point at which pulling out costs you your deposit and all legal fees spent to that point.
Research the area, not just the property
The property you buy is fixed. The area around it will change over time, and the quality of that area has a direct bearing on both your enjoyment and your resale value. Before making any offer, check crime rates in the immediate postcode, the Ofsted ratings of local schools (if relevant to you or future buyers), flood risk - particularly important given changing weather patterns, transport links and travel times to work, and any planning applications nearby that could alter the neighbourhood.
Leasehold vs freehold
Most flats in the UK are leasehold. If you are buying a flat, you will almost certainly be buying a leasehold interest. This is normal, but it comes with additional checks that freehold buyers do not face. Before making an offer on any leasehold property, find out how many years remain on the lease, what the annual ground rent is and whether it escalates, what the service charges are and what the sinking fund balance looks like, and who the freeholder is.
The single most important number is the remaining lease term. Below 90 years, some lenders become uncomfortable. Below 80 years, extending the lease becomes significantly more expensive because marriage value kicks in, and your buyer pool starts to shrink materially. If you buy a flat today with 85 years remaining and sell in 10 years, your buyer will face a property with 75 years remaining, a genuinely difficult position. Factor this into the purchase price accordingly.
Read the full leasehold guide: The leasehold considerations for a first-time buyer go well beyond lease length. Our dedicated guide covers all fourteen checks you should make before buying any leasehold flat in the UK, including EWS1 ratings, freeholder track record, service charge history, and the Renters Rights Act implications for future subletting.
Getting a survey: do not skip this
Your lender will arrange a valuation of the property to confirm it is worth the purchase price. This is not a survey. The valuation is for the lender's benefit and will not identify structural defects, damp, roof problems, or any of the physical issues that could cost you thousands after you move in. You need to commission your own survey independently.
For most properties in reasonable condition, an RICS Level 2 Homebuyer Report (around £400 to £700) is sufficient. It covers the main visible elements of the building and flags any urgent or significant defects. For older properties, those with unusual construction, or anything that feels like it might have issues, an RICS Level 3 Building Survey (around £700 to £1,500) is a more thorough inspection with detailed advice on repair costs. Do not let the cost deter you. A survey on a property with hidden structural problems is one of the best returns on a few hundred pounds you will ever make.
Use survey findings to negotiate: If your survey identifies significant defects, you have two options: ask the seller to fix them before completion, or negotiate a reduction in the agreed price to reflect the cost of putting them right yourself. A survey finding that costs £5,000 to fix often justifies a price reduction of at least that amount, and sellers who refuse are usually bluffing.
From offer to completion: how long does it take?
Once your offer is accepted, the typical timeline from offer to completion is 8 to 16 weeks, though chains, leasehold complexity, slow lenders, or sluggish local authority searches can extend this. Here is what happens in sequence after your offer is accepted:
- Instruct a solicitor and formally apply for your mortgage (aim to do both within 48 hours of offer acceptance)
- Lender commissions a valuation; you commission your survey
- Your solicitor raises searches and reviews the title, lease (if applicable), and draft contract
- Mortgage offer issued by the lender (typically 3 to 6 weeks after full application)
- Solicitor reports to you on the legal position; any outstanding queries resolved
- Exchange of contracts: legally binding, deposit transferred (typically 10% of purchase price)
- Completion: usually 1 to 4 weeks after exchange; keys released on the day
The most common causes of delay are a slow management pack from the freeholder (on leasehold properties), slow local authority searches, queries raised by the buyer's solicitor that take time to resolve, and buyers or sellers who are slow to respond to their solicitor's requests. Staying responsive to your solicitor, having your documents ready in advance, and chasing proactively when things go quiet are the most effective things you can do to keep your purchase moving.
After you move in: what to sort in the first week
The admin does not stop on completion day. In the first few days after moving in, make sure you have done the following to avoid problems and unexpected bills.
- Take meter readings for gas, electricity, and water on the day you get the keys and register with the existing suppliers immediately
- Redirect your post via Royal Mail from your previous address
- Update your address with your bank, employer, HMRC, DVLA, and any subscriptions
- Register on the electoral roll at your new address
- Confirm your buildings insurance is active (from exchange) and set up contents insurance
- Locate your stopcock, consumer unit, and boiler and understand how they work
- Check that your solicitor has submitted your stamp duty return and Land Registry application, which they should do within 14 days of completion
First-time buyer checklist
- Check your credit file with Experian, Equifax, and TransUnion and correct any errors
- Speak to a mortgage adviser and obtain a Decision in Principle
- Open a Lifetime ISA if eligible and you have time to meet the 12-month minimum before purchase
- Confirm your total budget: maximum mortgage plus deposit, minus all buying costs
- Confirm your first-time buyer status with your solicitor — particularly if you have ever inherited or been gifted property
- Check the area: crime rates, schools, flood risk, transport, planning applications
- For leasehold: confirm remaining lease term, ground rent, service charges, and freeholder identity
- Check the EPC rating and understand what it means for running costs
- Research recent sold prices in the street and surrounding area via Land Registry
- Visit at different times of day and on weekends, not just for viewings, but to assess the area
- Confirm the property is within your LISA price cap (£450,000) if you are using one
- Instruct a solicitor experienced with leasehold if buying a flat
- Submit your full mortgage application within 48 hours
- Commission an RICS Level 2 or Level 3 survey independently of the lender's valuation
- Respond to all solicitor and lender queries within 24 hours to keep things moving
- Set up buildings insurance to activate from the date of exchange, not completion
- Confirm your stamp duty position with your solicitor and check you qualify for first-time buyer relief
- Have your deposit and all additional funds ready in your solicitor's account ahead of exchange
The bottom line
Buying your first home takes longer, costs more, and involves more complexity than most first-time buyers expect. But it is entirely manageable when you understand what is happening at each stage and why. The buyers who have the smoothest experiences are almost always those who do the preparation upfront: know their budget before they start viewing, get their mortgage agreed in principle early, research properties properly before making offers, and stay responsive throughout the legal process. The buyers who struggle are usually those who skip one of those steps and end up discovering the problem mid-transaction, when it is expensive to fix.
Take your time, ask the questions that feel stupid but aren't, and do thorough research on any property you are seriously considering. Getting the right information before you offer is infinitely cheaper than discovering a problem after you have exchanged.