First-time buyer guide: buying your first home in 2026
Updated August 2026
Buying your first home feels overwhelming. There are solicitors, surveys, mortgage applications, and fees nobody mentioned until the last minute. But the process is straightforward once you understand the steps. This guide walks you through everything from saving your deposit to picking up the keys.
How much deposit do you actually need?
The minimum deposit for most lenders is 5% of the property price. On a £250,000 home, that's £12,500. Several high street lenders including Nationwide, Halifax, and Barclays offer 95% LTV mortgages to first-time buyers.
But a 5% deposit gets you the worst interest rates available. In August 2026, 95% LTV mortgages sit around 5.5%, while 90% LTV deals (10% deposit) are closer to 4.8%. That 0.7% difference on a £237,500 mortgage works out to about £95 per month.
The sweet spot for most first-time buyers is 10% to 15%. At 15% deposit (85% LTV), you unlock rates around 4.5%. If you can stretch to 20%, even better, but don't let the perfect be the enemy of getting on the ladder.
Stamp duty relief for first-time buyers
Here's some genuinely good news. First-time buyers in England and Northern Ireland pay zero stamp duty on the first £425,000 of a property's purchase price. Between £425,001 and £625,000, you pay 5%. If the property costs more than £625,000, you lose the relief entirely.
In practice, most first-time buyers outside London pay nothing. A £350,000 first home costs £0 in stamp duty. A £500,000 first home costs £3,750 (5% on the £75,000 above the £425,000 threshold). Compare that to a standard buyer paying £12,500 on the same £500,000 property.
You qualify if you've never owned a residential property anywhere in the world. Both buyers must qualify if purchasing jointly.
Mortgage in principle vs full application
A mortgage in principle (also called a decision in principle) is a lender's statement that they'd likely lend you a certain amount based on a basic check of your income and credit file. It's not a guarantee. Getting one takes about 15 minutes online and most lenders do a soft credit check that won't affect your score.
You need one before you start house hunting seriously. Estate agents ask for it when you make an offer. Most are valid for 60 to 90 days.
The full application happens after your offer is accepted. This involves 3 months of bank statements, 3 months of payslips (or 2 to 3 years of accounts if self-employed), proof of deposit source, and ID. The lender checks everything properly and sends a valuer to confirm the property is worth what you're paying.
What lenders look at when you apply
Income multiples are the starting point. Most high street lenders will offer 4 to 4.5 times your gross annual salary. A single buyer earning £35,000 can typically borrow £140,000 to £157,500. A couple earning £35,000 and £30,000 combined could borrow £260,000 to £292,500.
But lenders also stress-test your affordability by checking whether you could still pay if rates rose to 6% or 7%. They'll look at your committed outgoings: credit card payments, car finance, student loans, childcare costs. High outgoings reduce what they'll lend regardless of your salary.
Your credit score matters. You don't need a perfect score, but defaults, CCJs, or missed payments in the last 3 to 6 years will limit your options. Check your file with Experian, Equifax, or TransUnion before applying and fix any errors.
Deposit source is scrutinised under anti-money laundering rules. If it's savings, you'll need bank statements showing it accumulated. If it's a gift from family, you'll need a signed letter confirming it's a gift (not a loan) plus their bank statement showing the transfer.
The buying timeline: offer to keys
Once your offer is accepted, expect 8 to 12 weeks before you complete and get the keys. Some purchases go through in 6 weeks; complicated chains can drag to 16 weeks. Here's a rough breakdown:
- Week 1 to 2: Instruct solicitor, submit mortgage application, book survey
- Week 2 to 4: Mortgage valuation, lender underwriting, solicitor orders searches
- Week 4 to 6: Searches come back (some councils take 4 to 6 weeks), solicitor reviews contract and raises enquiries
- Week 6 to 8: Enquiries resolved, mortgage offer issued, you sign the contract
- Week 8 to 10: Exchange of contracts (you're now legally committed)
- Week 10 to 12: Completion day, you collect the keys
The biggest delays are local authority searches and chains. If you're buying from someone who's also buying, their purchase has to complete too. Chain-free properties often complete faster.
Costs beyond the deposit
Your deposit isn't the only upfront cost. Budget for these too:
- Solicitor/conveyancer fees: £1,000 to £1,800 including disbursements (searches, Land Registry fees, bank transfer charges)
- Survey: £250 for a basic condition report, £400 to £600 for a full building survey
- Mortgage arrangement fee: £0 to £2,000 depending on the deal
- Moving costs: £300 to £1,500 depending on distance
All told, expect to need £2,000 to £5,000 on top of your deposit. Don't spend every penny on the deposit itself and leave nothing for fees.
The Lifetime ISA: free money from the government
If you're between 18 and 39, a Lifetime ISA (LISA) is one of the best tools available for saving your deposit. You can put in up to £4,000 per year, and the government adds a 25% bonus on top. That's up to £1,000 in free money every year.
The property you buy must be worth £450,000 or less. You must have held the LISA for at least 12 months before using it. And you must be a first-time buyer. If you withdraw for any other reason, you'll pay a 25% penalty on the withdrawal amount, which means you lose some of your own money as well as the bonus.
At maximum contributions over 4 years, you'd have £20,000 (£16,000 of your own money plus £4,000 in government bonuses). It won't cover a full deposit in London, but in many parts of the country, it's a meaningful chunk.
Government schemes in 2026
Shared Ownership lets you buy a share of a property (typically 25% to 75%) and pay rent on the rest. A 25% share of a £250,000 property means your mortgage is only £62,500, and your 5% deposit would be just £3,125. The downside is you're paying rent on the remaining share, typically 2.75% of its value per year, plus service charges.
First Homes offers new-build properties at a 30% to 50% discount to local first-time buyers. The discount stays with the property when you sell. Availability varies hugely by area, and you'll need to check your local council's allocation policy.
These schemes have trade-offs. Shared Ownership properties can be harder to sell, and staircase costs add up. First Homes restricts your resale price permanently. Do the maths on the full cost over 5 to 10 years before committing.
Tips that actually help
Get your mortgage in principle before you start browsing Rightmove seriously. It sets your budget and stops you falling in love with something you can't afford.
Don't max out your budget. Lenders might offer you 4.5 times your income, but that doesn't mean you should borrow the maximum. Leave room for rate rises and property maintenance (typically 1% of property value per year).
Use a mortgage broker. They're either free (paid by the lender) or charge £300 to £500, and they can access deals you won't find on comparison sites. Whole-of-market brokers are best.
Start viewing properties below your maximum budget. If you can borrow £250,000, look at properties around £220,000 to £230,000. This gives you room to negotiate and means your monthly payments are comfortable rather than stretched.
This is a general guide, not financial advice. For personalised mortgage recommendations, speak to an FCA-regulated mortgage adviser.