Looking to buy your first property here in the UK? The property ladder is quite possibly one of the hardest things to get onto nowadays, unless you have the luxury of a trust fund or savings accrued from being vigilant with your money and on a high-paid salary.
However, there are ways in which you can improve your chances of buying your first property, whether that’s exploring what loans and government grants are available, or making financial changes that will help you save more money, hopefully in a quicker time frame.
What makes a first-time buyer?
A first-time buyer is someone who is buying their first home and has never owned a residential property in the UK or, in fact, any other country.
Even though it’s referred to as a first-time ‘buyer’, you’d actually be a first-time ‘homeowner’.
There are some people out there who will inherit their first home or have been given a home by another individual. As a result, you may not be considered a first-time buyer, and that will mean that you’re likely to miss out on special homebuying schemes and benefits that are available.
Some lenders may consider you for first-time buyer products, especially if it’s been a few years since you owned a property. However, it’s unlikely that you’ll qualify for any government schemes for first-time buyers. It’s beneficial to always check with individual providers on what schemes are available and what you’re eligible for.
Understanding mortgages
A mortgage loan is used to buy a home or a plot of land.
As an example, if you have savings of £15,000, for example, to put towards a property, and the home you want costs £300,000, you’ll need to get a loan that covers the remaining £285,000.
The loan usually comes from a bank or building society, but the availability of lenders is expanding beyond that nowadays, which is why it’s worth spending the money on a mortgage advisor.
You have two types of mortgages to choose from, repayment and interest-only. Regardless of which one you choose, you make monthly repayments.
Capital repayments are where you’re paying off the mortgage in full, and the interest-only option means you’re just paying off the interest on the mortgage.
Your home is used as security against the mortgage, so when they tell you you must be able to keep up with repayments, they mean it. Otherwise, the lender can take back your home, as a repossession.
Mortgages will typically last anywhere between two and forty years. The longer you repay the loan, the lower the monthly payments will be, but you’re going to be paying more interest over time.
Again, as a reminder, there are two types of mortgages:
- Repayment
- Interest-only
You’ve also got different interest rate types available, too. A fixed rate means the rate of interest you pay will remain the same, meaning your monthly repayments will stay the same. With variable interest rates or tracker rates, it means your repayments will go down or up, depending on the month.
Loan-to-value (LTV)
When the loan-to-value ratio is mentioned, this is simply the amount you’re borrowing to buy your home, compared to the value of the property.
For example, if your deposit is £24,000 and you get a mortgage of £216,000 for a £240,000 property, then your LTV is going to be 90%. Most lenders will offer 5% to 10% when it comes to LTV.
There are occasions where they’ll require a bigger deposit from you, but this might be due to your financial position and credit health, as well as the lender in question.
The cheapest interest rates are typically those that require a higher deposit of about 40%, which is a 60% LTV.
What deposit or finances do you need for buying your first property?
The deposit you’ll typically need for buying your first house is a considerable amount because it’s usually between 5-10% of the value of the property you’re buying. The lower the house value, the less you’ll pay.
As a first-time buyer, this will usually come from your savings, but you may get help from family, friends and house-buying schemes available.
The bigger the deposit you have, the less you might need to borrow, which reduces your monthly payments. With larger deposits, you’ll also get a wider range of mortgage deals to choose from.
Stamp duty as it currently stands
The stamp duty changed at the beginning of April in 2025. Stamp duty costs depend on where you are in the UK and the value of your new home.
With first-time buyers, you’ll typically get what’s called a ‘first-time buyer’s relief’, where you pay either zero or a reduced rate of tax on your property purchase.
England and Northern Ireland
First-time buyers in England and Northern Ireland will pay no Stamp Duty on homes up to £300,000.
For properties between £300,001 and £500,000, there’s a reduced rate of 5%. First-time buyers’ relief, however, isn’t available on homes valued over £500,000.
Scotland
In Scotland, first-time buyers don’t pay Land and Buildings Transaction Tax (LBTT) on homes up to £175,000.
Wales
First-time buyers in Wales will pay the same tax as other buyers. However, there’s no Land Transaction Tax (LTT) on properties costing up to £225,000.
Budgeting for other costs
There are other costs that you will likely need to budget for, apart from just the monthly repayments to the mortgage lender. These include:
- Survey costs
- Mortgage fees
- Solicitor or conveyancer fees
- Insurance and tax
- Moving costs and general property furnishing
It’s good to be aware of all these extra costs so that you can allocate your finances accordingly.
Buying schemes for first-time buyers
There is a range of schemes available to help first-time buyers get on the housing ladder, particularly if you only have a small deposit.
It’s a good idea to talk to an independent mortgage adviser about the options available, including specialist first-time buyer mortgages and new-build buying schemes.
What to expect in the process of buying your first property
To get a mortgage as a first-time buyer, it can feel more than a little daunting. There are a lot of forms to fill out and information to digest so knowing how it all works is helpful before you apply for one.
You can apply for a mortgage either:
- Directly from a bank or building society
- Using a regulated mortgage advisor or mortgage broker
Advisors and brokers are often the most typical route for those who have done a little research to begin with themselves. These are individuals who have full access to the market and, therefore, can find you the best deals to suit your needs. Mortgage advisors and brokers are great, especially if you only have a small deposit or you’re self-employed.
You’ll need to show proof of income, debts, and spending. If you’re self-employed, the process is more complex and limited, but you’ll need to show tax returns for the last two or three years, ideally.
What’s the difference between freehold and leasehold?
When you buy a home, the property is either ‘freehold’ or ‘leasehold’. If you’re buying a freehold property, you own both the house and the land that it sits on. Leasehold properties are where you own the home but not the land. That means you have ownership of your home for a set number of years.
With leasehold properties, you pay rent to the landowner, who is called the freeholder. There are typically service charges included, too, so that’s an extra cost to budget for. If you’re buying a flat or shared ownership, you’ll likely need to but the leasehold or a share of the freehold.
The longer the lease is, the better it is for both the buyer and seller. Anything that’s under 90 years is considered short, and if the lease goes under 80 years, the property may then be hard to sell or remortgage. It may be in your best interests to extend the lease, regardless of the cost.
FAQs
Now that you’ve got a bit more of an insight into home ownership as a first-time buyer, here are a few commonly asked questions.
1. How much money do I need to save for a deposit?
The amount you need to have available for a deposit can vary depending on the property’s value and the type of mortgage you choose. Regardless, you should expect to pay a 5-10% deposit on a property for most mortgage lenders. Others may ask for more, perhaps even 20-25% of the home’s value.
2. What additional costs should I budget for when buying my first property?
Beyond the deposit, you should also be budgeting for several other costs, which include home inspection fees, appraisal fees, closing costs, and moving expenses. It’s also wise to set aside extra funds for any unexpected expenses that may arise both during and after the buying process.
3. How long does the home-buying process usually take?
The home buying process will vary in length as there’s moving variables that can often be different for every chain and process. Typically, you can expect to complete a home in six months from the point at which an offer has been accepted. However, some may be shorter, while others are longer.
4. Do I need to hire a real estate agent as a first-time buyer?
While it’s not mandatory to hire a real estate agent, it is something that’s highly recommended for first-time buyers. Experienced agents can guide you through the process, help find suitable properties, and negotiate on your behalf. They can also help to navigate potential pitfalls.
5. What types of home inspections should I consider?
As a first-time buyer, some inspections are crucial to do for both your own protection and to ensure the property is structurally sound.
There are different levels of building surveys available, which you can find more information here.
6. How can I improve my chances of getting approved for a mortgage?
To improve your chances of mortgage approval, you can do the following:
- Check and improve your credit score (register to vote and update your address)
- Save for a larger deposit
- Reduce your existing debt
- Maintain stable employment
- Get a mortgage in principle before viewing and offering on properties.
