Save a deposit of at least 5%. Sort your credit file early, it decides which lenders will consider you. Budget for stamp duty, solicitor fees and the survey. Get an agreement in principle before you offer. Then apply, wait for the valuation, and exchange. Usually around three months from offer to keys.
Buying a first home is one of the biggest financial commitments most people ever make, and it's normal for it to feel daunting, especially if you think you're starting late. But the numbers say otherwise: the average first-time buyer in England is now 34, according to the English Housing Survey, well past the age most people assume is typical. Wherever you're starting from, knowing how the process actually works now puts you ahead of most buyers before you've even viewed a property.
This blog covers what a first time buyer actually needs to know in 2026: how much deposit to save, which government schemes are worth using, what stamp duty will cost, how the buying process works step by step, and where the money disappears that nobody warns you about.
The minimum deposit most lenders will accept is 5% of the purchase price. On a £250,000 home, that's £12,500. But the size of your deposit changes far more than just whether you qualify, it changes the interest rate you're offered. With a 5% deposit, putting you at 95% loan-to-value, typical rates in 2026 sit around 5.2% to 5.6%. Stretch to a 10% deposit, 90% loan-to-value, and rates drop to roughly 4.6% to 5.0%. At 15% down the range falls to about 4.4% to 4.7%, at 20% down to around 4.2% to 4.5%, and at 25% or more you're usually looking at the best rates on the market, somewhere between 4.0% and 4.3%.
The gap matters in real money. On a £250,000 property, a 95% mortgage at 5.4% costs roughly £1,327 a month over 30 years. The same property at 85% loan-to-value and 4.5% costs around £1,077 a month, a saving of £250 a month, or £3,000 a year, just for finding another 10% deposit. A smaller loan also means less total interest paid over the life of the mortgage.
The Lifetime ISA, or LISA, is the most valuable tool available to first time buyers under 40, and it's still underused. You can pay in up to £4,000 a year and the government adds a 25% bonus on top, worth up to £1,000 a year in free money. The rules to know: you must open the account before your 40th birthday, you need to have held it for at least 12 months before using it toward a purchase, and the property must cost £450,000 or less. If you think you'll buy within the next few years, open a LISA now with even £1 in it. The 12-month clock starts from the day you open the account, not the day you start saving properly, so every month you wait is a month added to the wait later.
Gifted deposits are common and lenders are used to seeing them. You'll need a letter from whoever is gifting the money confirming it's a gift, not a loan, and that they have no stake in the property.
Once you've maxed your £4,000 annual LISA contribution, keep saving in the highest-rate easy-access account you can find. A dedicated account you don't touch builds the deposit and the habit at the same time.
Freedom to Buy, formerly known as the Mortgage Guarantee Scheme, was made permanent in July 2025. The government guarantees part of the loan so lenders are willing to offer 95% mortgages on homes worth up to £600,000. You don't apply to the scheme directly, you simply apply for a 95% mortgage with a participating lender and the guarantee operates behind the scenes. It's the scheme most first time buyers with a small deposit end up using, since it widens which lenders will say yes rather than adding extra steps in an already complicated process.
Shared Ownership lets you buy a share of a home rather than the whole thing, and pay rent on the rest. Under the current funding rules for homes built through the Affordable Homes Programme, the minimum share you can buy has come down to as little as 5% to 10% of the property's value, with a maximum of 75%. Income caps apply: £80,000 a year outside London, £90,000 in London. You can "staircase" over time, buying further shares as your income grows, and in many cases you can do this in 1% increments during the first 15 years with reduced fees, making it far more flexible than it used to be.
First Homes offers new-build properties at a minimum 30% discount to market value, rising to 50% in some areas depending on the local council. The discount is permanent, meaning it stays with the property forever, so if you sell, you must sell to another eligible buyer at the same percentage discount. It's aimed at first-time buyers and key workers and is only available in England.
In Wales, Help to Buy is still running for new-build homes up to £300,000, offering a government equity loan of up to 20% of the property value, interest-free for the first five years. This scheme closed in England back in 2022, so it's now a Wales-only option.
This is where the picture has shifted most since the pandemic-era stamp duty holidays. Since April 2025, the zero-rate threshold for first time buyers dropped from £425,000 to £300,000, and the maximum property value eligible for any relief at all fell from £625,000 to £500,000.
In practice, that means a first time buyer pays nothing on a property up to £300,000. Between £300,001 and £500,000, the rate is 5% on the amount above £300,000. Above £500,000, first-time buyer relief disappears entirely and standard rates apply. So a £350,000 first home costs £2,500 in stamp duty, and a £425,000 home costs £6,250. This applies in England and Northern Ireland; Scotland runs its own Land and Buildings Transaction Tax and Wales runs Land Transaction Tax, both with different first-time buyer treatment and their own thresholds. Stamp duty is due within 14 days of completion and it can't be paid out of a LISA, so budget for it separately from your deposit rather than assuming it will come out of the same pot.
Most lenders offer between 4 and 4.5 times your gross annual income. Some specialist first-time buyer products stretch to 5 or 6 times income, usually in exchange for a bigger deposit, somewhere in the 15% to 25% range, and a clean credit history. A single buyer earning £35,000 is typically looking at £140,000 to £157,500 at standard multiples, rising to around £210,000 at the higher end. A couple with a combined income of £70,000 is usually looking at £280,000 to £315,000, rising to roughly £350,000 at 5 times income.
These are ceilings, not guarantees. Lenders also assess your outgoings, existing debts, credit history, job type, and how much deposit you're putting down. A Mortgage in Principle, also called an Agreement or Decision in Principle, tells you roughly what a lender would offer before you start viewing seriously, and it makes estate agents and sellers take your offers more seriously too. It usually runs a soft credit check and lasts around 90 days.
Of course, how much money you make gets most of the attention, but a thin or adverse credit score sinks more first-time buyer applications than most people expect. Before applying, pull your report from one of the main agencies, Experian, Equifax, or TransUnion, and fix what you can: clear missed payments, get on the electoral roll, and bring down credit card balances relative to their limits. Having no credit history at all can count against you almost as much as a poor one. A small credit card used lightly and paid off in full each month for a few months is usually enough to turn a thin file into a usable one. If you're self-employed, expect to provide two to three years of accounts or tax returns rather than payslips.
Most first time buyers choose a fixed-rate mortgage, locking in a rate for 2, 3, or 5 years so payments stay predictable. Variable rates, whether tracker, standard variable, or discount, move up or down with the market, which can pay off if rates fall but adds uncertainty. Given how much a mortgage payment shapes a monthly budget, fixed rates remain the safer default for most buyers, especially in a market where the direction of the base rate is genuinely uncertain.
Start by sorting your finances: check your credit report, get on the electoral roll, and open a LISA if you're eligible. Next, get a Mortgage in Principle before you view anything seriously, since it signals to sellers that you're a serious buyer. Once you find somewhere, make your offer through the estate agent. In England and Wales, offers aren't legally binding until exchange of contracts, so either side can still pull out; in Scotland, offers are usually binding once accepted.
With an offer accepted, submit your full mortgage application, including payslips or accounts and proof of your deposit. Arrange a survey too. The lender's own valuation only protects the lender, it doesn't check for problems. A RICS Level 2 Home Survey, roughly £400 to £900, or a Level 3 Building Survey at £600 to £1,500 for older or heavily altered properties, protects you instead.
Conveyancing runs alongside this. Your solicitor checks the title, runs local searches, and handles enquiries with the seller's solicitor, and this stage typically takes 8 to 12 weeks. At exchange of contracts, you pay a deposit, usually 10% of the purchase price, and the deal becomes legally binding on both sides. Get buildings insurance in place from this point, not from completion. Completion is the final step: funds transfer, keys are handed over, and your solicitor registers you as the new owner and pays your stamp duty on your behalf.
Most first time buyers should expect 3 to 5 months from an accepted offer to completion, and 6 to 12 months in total once house-hunting is included.
Budgeting for the deposit is only part of the picture. Legal fees typically run £1,000 to £2,500, a survey costs £300 to £1,500 depending on type and the property's age, and mortgage arrangement and valuation fees can add another £0 to £1,000, though some of these can be added to the loan itself. Removal costs usually land between £500 and £2,000, and buildings insurance needs to be in place from the point of exchange. It's also worth keeping a repair and furnishing buffer of £1,000 to £3,000, because there is always something that needs fixing in the first few months.
On a £280,000 first home with a 10% deposit, total cash needed on completion day, once these fees are added, can reach £35,000 or more. Save for the fees alongside the deposit, not after it.
Stretching a budget so tightly that one unexpected bill causes a real problem is one of the most common errors, closely followed by skipping the Mortgage in Principle and losing out to buyers who already have one. Skipping the survey to save a few hundred pounds is another false economy, since a structural issue found after exchange is far more expensive than the survey that would have flagged it. Many buyers also forget to factor in stamp duty and legal fees when working out how much deposit is genuinely enough, and plenty go it alone rather than seeking specialist mortgage advice.
Buying a first home in 2026 comes with a smaller stamp duty allowance than a few years ago, but also more scheme options and more lenders competing for 5% deposit borrowers than at almost any point since the financial crisis. The buyers who move fastest are the ones who get their deposit, credit file, and Mortgage in Principle sorted before they start looking, not after they've fallen for a house they can't yet prove they can afford.
If you're thinking about buying your first home and aren't sure where to start, we're here to help. Based in Benfleet and working across Essex, our specialist team of mortgage brokers have arranged over £500 million in funding with a 98% application approval rate, drawing on panels that include Halifax, Nationwide, HSBC and Barclays among others. So, whether your income is straightforward or a little more complicated, one of our specialist mortgage brokers who know the first-time buyer market can make the difference between guessing your way through and knowing exactly where you stand.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Written by
Ashley has spent over 20 years in property, building and selling two estate agencies before founding the firm. He leads residential, buy-to-let and protection advice at AB Mortgages, and the complex, high value cases at AB Specialist Finance. His standard is simple: every client gets MD-level service.
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