First-Time Buyer Guide UK
Everything you need to know about buying your first home
The Process: Step by Step
- Save your deposit — aim for at least 5–10% of the property price, though 15–20% gets you significantly better rates.
- Get a mortgage in principle (MIP) — a lender confirms roughly how much they’d lend you. Takes 10 minutes online. Lasts 60–90 days.
- Find your property — Rightmove, Zoopla, OnTheMarket. Visit lots. Don’t fall in love with the first one.
- Make an offer — usually below asking price. The agent works for the seller, not you.
- Mortgage application — full application with your chosen lender.
- Survey — get the property inspected. Don’t skip this.
- Conveyancing — your solicitor handles legal checks (title, searches, contracts). Takes 8–12 weeks typically.
- Exchange contracts — you’re now legally committed. You pay your deposit.
- Completion — you get the keys!
Key Concept
Nothing is legally binding until exchange of contracts. Before that, either party can pull out without penalty (though you may lose survey and solicitor fees). This is why “gazumping” exists in England — someone offers more after your offer was accepted. Scotland works differently with binding missives.
Saving for a Deposit: LISA
A Lifetime ISA lets you save up to £4,000 per year and the government adds 25% (£1,000 free per year). You can use it for a first home up to £450,000. Start one ASAP — you need to have held it for 12 months before using it.
Other Help Available
- Shared Ownership — buy 25–75% of a property and pay rent on the rest. Lower deposit needed.
- First Homes — new-build homes sold at 30–50% discount. Must be under £250,000 after discount (£420,000 in London).
- Bank of Mum and Dad — gifts for deposits are fine but lenders will ask for a letter confirming it’s a gift, not a loan.
Stamp Duty Relief for First-Time Buyers
First-time buyers pay no Stamp Duty on the first £425,000 of a property (up to £625,000 total). This saves you up to £8,750 compared to a regular buyer. Above £625,000, you pay the standard rates with no relief.
Hidden Costs to Budget For
| Cost | Typical Amount |
|---|---|
| Survey (HomeBuyer Report) | £400–£700 |
| Solicitor / Conveyancer | £1,000–£2,000 |
| Mortgage arrangement fee | £0–£2,000 |
| Moving costs | £500–£2,000 |
| Furniture & appliances | £2,000–£10,000 |
| Buildings insurance (required) | £100–£300/year |
Real-World Example
On a £250,000 property, budget at least £5,000 for costs on top of your deposit. Many first-time buyers are shocked by how much disappears before they even move in. Plan for it.
How Much Deposit Do You Really Need?
You canbuy with 5%, but you probably shouldn’t. With a 5% deposit on £250,000, you’re borrowing £237,500 at the worst rates available. Save 10–15% if possible — the interest rate drops significantly at 85% and again at 75% LTV, saving you thousands over the deal.
Warning
Don’t spend every penny on your deposit. You need a buffer for moving costs, emergency repairs, and the first few months of higher-than-expected bills. Being “house poor” is miserable.