How much deposit do I need as a first-time buyer?

The minimum deposit for most first-time buyers is 5% of the purchase price (95% LTV mortgages). However, a 10% deposit (90% LTV) unlocks significantly better rates and a wider choice of lenders. A 15–20% deposit is considered strong and opens up the best deals. For a £250,000 property: 5% = £12,500, 10% = £25,000, 15% = £37,500.

What is the Lifetime ISA (LISA) and how does it help first-time buyers?

The Lifetime ISA (LISA) gives first-time buyers a 25% government bonus on savings of up to £4,000 per year — that's up to £1,000 free money annually. To use a LISA for a property purchase: you must be aged 18–39 when you open it; the property must cost £450,000 or less; you must have had the LISA open for at least 12 months. Note: withdrawing for non-property, non-retirement purposes incurs a 25% penalty (which effectively returns the bonus plus a small portion of your own savings).

Do first-time buyers pay stamp duty?

First-time buyers get stamp duty relief in England and Northern Ireland. From April 2025, the thresholds reverted: first-time buyers pay 0% on the first £300,000 (previously £425,000 under temporary relief) and 5% on the portion from £300,001 to £500,000. Properties above £500,000 get no first-time buyer relief. Always use the stamp duty calculator to get an exact figure.

What is Shared Ownership?

Shared Ownership lets you buy a share of a property (10%–75%) from a housing association and pay subsidised rent on the rest. You can buy additional shares over time ('staircasing') up to 100%. It's designed for people who can't afford to buy outright. Eligibility: household income under £80,000 (£90,000 in London), first-time buyer or previous homeowner who can no longer afford to buy.

How long does the first-time buyer process take?

From accepted offer to completion, expect 8–16 weeks (2–4 months). The process: offer accepted → instruct solicitor → mortgage application → survey → searches → exchange → completion. Chains (when sellers are also buying) can add delays. Cash buyers or new builds without a chain can complete faster; a long chain can extend to 6+ months.

What is an Agreement in Principle (AIP)?

An Agreement in Principle (also called a Decision in Principle or Mortgage in Principle) is a lender's indication — before a formal application — of how much they'd be willing to lend, based on a soft credit search. Estate agents often ask for one before accepting an offer. Getting an AIP doesn't guarantee a mortgage; the full application involves a hard credit check and full underwriting.

What surveys do I need when buying a house?

The mortgage valuation (done by the lender) confirms the property is worth what you're paying — it's for the lender, not you. You should also get your own survey: a Level 2 (HomeBuyer Report, ~£400–600) is suitable for most properties; a Level 3 (Full Structural Survey, £600–1,500) is recommended for older, unusual, or high-value properties. Skipping a survey to save money is a common and costly mistake.

What costs should I budget for beyond the deposit?

Beyond the deposit, budget for: stamp duty (if applicable), solicitor/conveyancing fees (£1,000–£2,500), mortgage arrangement fee (£0–£2,000), survey (£400–£1,500), mortgage broker fee (£0–£500), removal costs (£300–£2,000+), buildings and contents insurance, and initial furnishing. Many first-time buyers underestimate total buying costs — add 3–5% of the purchase price on top of your deposit as a buying costs buffer.

First-Time Buyer Guide UK 2026 — LISA, Deposit, Stamp Duty Relief

1. How Much Deposit Do You Need?

The minimum deposit for most residential mortgages is 5% of the purchase price. But the deposit size you choose has a big impact on the rate you'll get.

Deposit	LTV	Example (£250k property)	Rate tier
5%	95%	£12,500	Highest rates, fewer lenders
10%	90%	£25,000	Good choice of lenders
15%	85%	£37,500	Better rates
20%	80%	£50,000	Strong positioning
25%+	75% or less	£62,500+	Best rates available

Rule of thumbEach 5% extra deposit unlocks a better rate tier. The jump from 90% LTV to 85% LTV can save 0.2–0.5% in rate — on a £200,000 mortgage, that's £300–700/year.

What counts as a deposit?

Most lenders accept: cash savings, LISA bonus, gifted deposits from family members (with a letter confirming it's a gift, not a loan), and equity from a previous property sale. They do not generally accept borrowed money (personal loans, credit cards) as part of a deposit.

2. Lifetime ISA (LISA) — Free Government Bonus

The Lifetime ISA is the most valuable government scheme for first-time buyers. You save up to £4,000 per tax year and the government adds a 25% bonus — up to £1,000 free per year.

LISA key facts

Open between age 18 and 39 (can contribute until age 50)
Government adds 25% bonus (paid monthly)
Maximum contribution: £4,000/year → £1,000 bonus
Property must cost £450,000 or less
LISA must be open for at least 12 months before use
Only usable for first-time purchases or from age 60

Withdrawal penaltyWithdrawing for any other reason incurs a 25% penalty on the full amount. On £10,000 savings + £2,500 bonus = £12,500, the 25% penalty = £3,125 — leaving you with £9,375, less than your original £10,000 savings. Only use a LISA if you're confident it's going towards a first home or retirement.

LISA vs Help to Save

The LISA replaces the old Help to Buy ISA (which closed to new applicants in 2019). If you have an old Help to Buy ISA, you can transfer it to a LISA — check with your provider.

3. Stamp Duty Land Tax for First-Time Buyers

In England and Northern Ireland, first-time buyers get relief on Stamp Duty Land Tax (SDLT). Scotland and Wales have separate systems (LBTT and LTT).

First-time buyer SDLT rates (England, from April 2025)

Property Price	Standard Rate	FTB Rate	Saving vs Standard
£0 – £300,000	0%	0%	—
£300,001 – £500,000	5%	5%	£0 (standard 5% applies)
£500,001 – £925,000	5%	No FTB relief	—
Over £925,000	10%	No FTB relief	—

Note:The temporary relief (0% up to £425,000) that applied from 2022–March 2025 has ended. From April 2025, the threshold reverted to £300,000. Always use the Stamp Duty Calculator for an exact figure.

Scotland (LBTT) and Wales (LTT)

Scotland: Land and Buildings Transaction Tax (LBTT) — first-time buyer relief raises the 0% threshold to £175,000. Wales: Land Transaction Tax (LTT) — no separate first-time buyer relief; standard rates apply from £225,000.

4. Government Schemes for First-Time Buyers

Shared Ownership

Buy a share (10%–75%) of a property from a housing association and pay subsidised rent on the remainder. You can buy additional shares over time ('staircasing'). Eligibility: household income under £80,000 (£90,000 in London), and you must be a first-time buyer or previous homeowner who cannot currently afford to buy.

Deposit on your share only (e.g., 10% deposit on a 40% share of a £300k property = 10% × £120,000 = £12,000)
Pay rent on the unsold share to the housing association
Staircasing allows you to buy more over time
Service charges apply (leasehold)

Mortgage Guarantee Scheme

The government guarantees a portion of 95% LTV mortgages, encouraging lenders to offer them. You still pay a 5% deposit — the guarantee is between the government and the lender. This scheme is available until June 2027.

First Homes Scheme

Offers new-build homes at a discount of at least 30% below market value to local first-time buyers and key workers. The discount is perpetual — when you sell, the home must be sold at the same discount. Local eligibility criteria apply.

5. The Mortgage Process Step by Step

Check your credit file
Use Experian, Equifax, or TransUnion. Fix any errors, pay off outstanding defaults, and avoid new credit applications for 3–6 months before applying.
Get an Agreement in Principle (AIP)
A soft credit check that gives an indicative loan amount. Estate agents often require one. Valid for 60–90 days. Does not affect your credit score.
Find a property and make an offer
Once accepted, you move to formal mortgage application. Your AIP becomes a formal application — this involves a hard credit check.
Appoint a solicitor/conveyancer
They handle the legal transfer of ownership. Get quotes — expect £1,000–£2,500 including searches and Land Registry fees.
Survey
The lender conducts a valuation (for them, not you). Commission your own survey: Level 2 (HomeBuyer Report) or Level 3 (Full Structural) for older properties.
Searches and enquiries
Local authority, drainage, environmental, and chancel repair searches. These reveal planning issues, flood risk, and other property-specific problems.
Exchange of contracts
You and the seller sign and exchange contracts. You pay your deposit (to the solicitor). You are now legally committed — pulling out forfeits your deposit.
Completion
Money transfers, keys change hands. You own the property. Usually 1–4 weeks after exchange.

Full cost breakdown

Cost	Typical Range
Deposit	5–25% of purchase price
Stamp duty	£0–£15,000+ (use calculator)
Solicitor/conveyancer	£1,000–£2,500
Survey	£400–£1,500
Mortgage arrangement fee	£0–£2,000
Mortgage broker fee	£0–£500
Buildings insurance	From £150/year
Removals	£300–£2,000+

6. Common First-Time Buyer Mistakes

Not getting a LISA early enough. The 12-month waiting period means you need to open one before you're ready to buy. Open one now, even if buying is 2+ years away.
Taking the highest mortgage offered. Lenders offer 4–5× income; that doesn't mean it's affordable. Factor in rate rises, life changes, and additional property costs.
Skipping the survey. A HomeBuyer Report costs £400–600 and can identify thousands in remedial work — or give you negotiating power to reduce the offer price.
Not shopping around for a mortgage. Using a whole-of-market broker typically finds better deals than going direct. Brokers are often free to buyers (paid by lender).
Underestimating buying costs. Budget 3–5% of purchase price on top of deposit for transaction costs.
Applying for new credit before completion. A new credit card or car finance application during the mortgage process can cause the lender to withdraw the offer.

Frequently Asked Questions

The minimum is 5% (95% LTV). A 10% deposit opens up significantly better rates and more lenders. Strong applications start at 15–20%. For a £250,000 property: 5% = £12,500, 10% = £25,000, 15% = £37,500.

The LISA offers first-time buyers a 25% government bonus on savings up to £4,000/year — up to £1,000 free annually. Open between 18–39; property must cost £450,000 or less; LISA must be open 12+ months before use. A 25% withdrawal penalty applies for non-qualifying withdrawals.

From April 2025 (England), first-time buyers pay 0% on the first £300,000 and 5% on the portion from £300,001 to £500,000. No relief applies above £500,000. Scotland and Wales have separate systems.

Buy a 10%–75% share of a property and pay subsidised rent on the rest. You can buy more shares over time (staircasing). Available to first-time buyers and previous homeowners who can no longer afford to buy outright, with household income under £80,000 (£90,000 in London).

Typically 8–16 weeks from accepted offer to completion. The process: solicitor instructed → mortgage application → survey → searches → exchange → completion. Chains can extend timelines significantly. New builds without a chain can complete faster.

The lender's valuation is for them, not you. Get your own: Level 2 (HomeBuyer Report, ~£400–600) for most properties; Level 3 (Full Structural Survey, £600–1,500) for older or unusual properties. Skipping a survey is a false economy.

Beyond your deposit: stamp duty, solicitor (£1,000–£2,500), survey (£400–£1,500), mortgage arrangement fee (£0–£2,000), broker fee (£0–£500), removals (£300–£2,000+), and buildings insurance. Budget 3–5% of purchase price on top of deposit for all transaction costs.

A lender's indication of how much they'd lend, based on a soft credit check. Estate agents often ask for one before accepting an offer. Valid 60–90 days. Doesn't guarantee a final mortgage offer — full application involves a hard credit check and full underwriting.