🇬🇧 First-Time Buyer Guide 2026
Everything UK first-time buyers need to know — stamp duty relief, government schemes, how much you can borrow and a step-by-step route to getting the keys.
How much can you borrow?
Affordability Calculator →Work out your monthly payments
Mortgage Calculator →Calculate your stamp duty
Stamp Duty Calculator →First-Time Buyer Stamp Duty Relief 2026
As a first-time buyer in England, you benefit from reduced SDLT. The April 2025 changes reduced the relief compared to COVID-era thresholds:
| Property Price | SDLT Rate (FTB) | Example Tax |
|---|---|---|
| Up to £300,000 | 0% | £0 |
| £300,001 – £500,000 | 5% on excess | £300k purchase = £0 £400k purchase = £5,000 £500k purchase = £10,000 |
| Above £500,000 | Standard rates apply | FTB relief lost entirely |
Scotland (LBTT) and Wales (LTT) have separate thresholds. Source: HMRC.
Government Schemes for First-Time Buyers
💰 Lifetime ISA (LISA)
- Save up to £4,000/year — government adds 25% bonus (up to £1,000/year)
- Must open between age 18–39; can use from age 18
- Property must be worth ≤ £450,000 and your first home
- Must have held the LISA for at least 12 months before use
- 25% withdrawal penalty for non-qualifying withdrawals
🏠 Mortgage Guarantee Scheme
- Buy with as little as a 5% deposit (95% LTV)
- Government guarantees part of the mortgage to encourage lenders
- Available on properties up to £600,000
- Open to first-time buyers and home movers
- Not available on new-builds (Shared Ownership schemes available instead)
🏘️ Shared Ownership
- Buy a 10–75% share of a property; pay subsidised rent on the rest
- Smaller deposit required — you only mortgage your share
- "Staircase" (buy more shares) up to 100% ownership over time
- Available on new-builds and some resale properties via housing associations
- Service charges and ground rent apply — factor into affordability
🏡 First Homes Scheme
- New-build homes discounted by 30–50% for eligible first-time buyers
- Discount remains on the property when you sell (passes on to next buyer)
- Must be a first-time buyer and meet local income caps
- Key workers and armed forces personnel get priority
How Much Can You Borrow?
UK lenders use income multiples and stress tests to calculate maximum borrowing. In 2026:
| Income | 4x (conservative) | 4.5x (typical) | 5x (max) |
|---|---|---|---|
| £30,000 | £120,000 | £135,000 | £150,000 |
| £40,000 | £160,000 | £180,000 | £200,000 |
| £50,000 | £200,000 | £225,000 | £250,000 |
| £60,000 | £240,000 | £270,000 | £300,000 |
| £80,000 | £320,000 | £360,000 | £400,000 |
Joint applications add both incomes. 5x multiples typically require 10%+ deposit and strong credit. Stress tested at rate +3%.
Step-by-Step: Buying Your First Home
- Check affordability — use our affordability calculator and get an Agreement in Principle (AIP) from a lender
- Open a LISA — if you're 18–39 and not buying for 12+ months, start saving now for the government bonus
- Save your deposit — aim for 10% minimum; 20%+ gets substantially better rates
- Find a property — search Rightmove, Zoopla; instruct an estate agent if selling too
- Make an offer — research recent sold prices; offers are not legally binding at this stage
- Instruct a solicitor/conveyancer — shop around for quotes; they handle all legal work
- Arrange a full mortgage — use an independent broker to find the best deal
- Surveys & searches — homebuyer survey recommended (£400–700); local authority searches (~£300)
- Exchange contracts — legally binding; you pay your deposit (usually 10% of purchase price)
- Completion — mortgage funds transferred; keys collected. You're a homeowner!
Typical First-Time Buyer Costs (£300k property)
| Cost | Typical Amount | Notes |
|---|---|---|
| Deposit (10%) | £30,000 | Minimum 5%; 10%+ recommended |
| Stamp duty (FTB) | £0 | 0% up to £300k for FTBs |
| Solicitor / conveyancer | £1,200–£2,000 | Including searches and Land Registry |
| Mortgage arrangement fee | £0–£1,500 | Many fee-free options exist |
| Survey (Homebuyer report) | £400–£700 | Essential — don't skip |
| Removal costs | £500–£2,000 | Depends on volume and distance |
| Total estimated upfront | ~£32,000–£36,000 | On a £300k purchase with 10% deposit |
Ready to calculate your numbers?
Mortgage Calculator → Stamp Duty Calculator → Affordability Calculator →FAQs
How much stamp duty does a first-time buyer pay in 2026?+
First-time buyers pay 0% SDLT on properties up to £300,000. Between £300,001 and £500,000 you pay 5% on the portion above £300k. Above £500,000 you lose FTB relief entirely and pay standard rates. Example: a £350,000 purchase = £2,500 SDLT (5% of £50,000).
What is the Lifetime ISA and how does it help first-time buyers?+
A Lifetime ISA (LISA) lets you save up to £4,000 per year and the government adds a 25% bonus (up to £1,000/year). You can use it towards a first home worth up to £450,000. You must be aged 18–39 to open one. Withdrawal for non-qualifying purposes incurs a 25% penalty.
What is the Mortgage Guarantee Scheme?+
The UK government's Mortgage Guarantee Scheme enables lenders to offer 95% LTV mortgages (5% deposit) with a government guarantee. This means first-time buyers can buy with just a 5% deposit. The scheme has been extended and supports purchases up to £600,000.
What is Shared Ownership?+
Shared Ownership lets you buy a share (10–75%) of a new-build or resale property from a housing association and pay subsidised rent on the rest. You can buy more shares over time ("staircasing") until you own 100%. A much smaller deposit is required because you only mortgage your share.
How much deposit do I need as a first-time buyer?+
The minimum deposit for most first-time buyers is 5% (with the Mortgage Guarantee Scheme). However, a 10% deposit unlocks better rates and lower monthly payments, while 20%+ gives you access to the best available deals and avoids paying higher-rate mortgage insurance products.
⚠️ Not financial advice. Scheme eligibility and rates change frequently. Always verify with a qualified mortgage broker or solicitor. Sources: GOV.UK, HMRC.