First-Time Buyer Guide

Buying your first home is exciting but can feel overwhelming. With average prices in some areas exceeding £500,000, getting on the property ladder requires careful planning, understanding of government schemes, and realistic expectations about what you can afford.

This guide covers everything you need to know as a first-time buyer in the UK—from understanding prices in different regions to navigating mortgage applications, stamp duty, and government assistance schemes.

Understanding the UK Property Market in 2026

The UK housing market has undergone significant changes in recent years. After the volatility of 2022-2024, when interest rates rose sharply and prices wobbled, the market has settled into a new equilibrium. But "affordable" remains relative—property prices still far outstrip earnings in most of the UK.

As a first-time buyer, your biggest challenges are likely to be raising the deposit, qualifying for a mortgage, and finding somewhere within your budget. Understanding the market you're buying into is the first step to navigating it successfully.

Average House Prices by Region

Where you buy makes an enormous difference to what you pay. Here's a breakdown of average first-time buyer property prices across the UK regions:

London and the South East

The capital and its surrounding counties remain the most expensive places to buy. Average first-time buyer prices in London now exceed £500,000, with central areas regularly pushing past £600,000 for a decent flat. In commuter-belt areas like Berkshire, Hertfordshire, and Surrey, expect to pay £350,000-£450,000 for a reasonable property.

The South West (around £280,000 average) and East Anglia (£300,000) are slightly more affordable but still challenging for single buyers on average earnings.

Major Cities

Regional cities offer more realistic entry points. Birmingham averages around £220,000 for first-time buyer properties, Manchester around £210,000, Leeds around £195,000, and Liverpool around £160,000. These cities have seen significant price growth but remain far more accessible than London.

Cities like Bristol (£280,000) and Edinburgh (£230,000) sit at the higher end of the regional city scale but offer strong job markets and good long-term prospects.

Northern England and Wales

The most affordable regions remain the North East, parts of Yorkshire, and Wales, where first-time buyer properties can be found for £140,000-£180,000. These areas offer excellent value but often require compromises on local job opportunities or transport links.

Calculating What You Can Afford

Before you start viewing properties, work out a realistic budget. Mortgage lenders will tell you what they're willing to lend, but that doesn't mean you should borrow that much.

The 4.5x Salary Rule

Most mortgage lenders cap borrowing at 4.5 times your annual income (for single applicants) or combined income (for couples). Some may offer slightly more, but this is a useful rule of thumb:

• £30,000 salary = £135,000 maximum mortgage
• £40,000 salary = £180,000 maximum mortgage
• £50,000 salary = £225,000 maximum mortgage
• £60,000 combined = £270,000 maximum mortgage

The Deposit Question

Your deposit makes up the difference between the mortgage and the purchase price. The bigger your deposit, the better the mortgage deal you'll access. Here's how deposit size affects borrowing:

• 5% deposit — "95% LTV" mortgages are available but interest rates are higher
• 10% deposit — More options, slightly better rates
• 15%+ deposit — Access to the best rates, more lender choice
• 25%+ deposit — Best rates, exclusive deals

On a £200,000 property, a 10% deposit is £20,000; a 15% deposit is £30,000. Saving that extra £10,000 could save you thousands in interest over the life of the mortgage.

Ongoing Costs to Budget For

Your mortgage payment is only part of the cost of homeownership. Don't forget:

• Council tax — £1,500-£2,500+ per year depending on band
• Buildings insurance — £150-£400 per year
• Maintenance — budget 1% of property value annually
• Service charges — especially for flats, can be £100-£300+ monthly
• Utilities — gas, electric, water, broadband

Stamp Duty for First-Time Buyers

One of the biggest financial benefits for first-time buyers is stamp duty relief. You pay no stamp duty on properties up to £300,000 if you're a first-time buyer, and 5% on the portion between £300,001 and £500,000.

2026 Stamp Duty Rates for First-Time Buyers

Property Price	Stamp Duty
Up to £300,000	£0
£300,001 - £500,000	5% of amount over £300,000
Above £500,000	Normal rates apply (no first-time buyer relief)

For example, on a £350,000 property, you'd pay 5% of £50,000 = £2,500 in stamp duty. Without first-time buyer relief, you'd pay £7,500. That's a significant saving.

Important: First-time buyer relief only applies if you've never owned a property anywhere in the world. If you've inherited a property or owned abroad, you may not qualify.

Government Schemes for First-Time Buyers

Several government initiatives can help first-time buyers get on the property ladder:

Help to Buy: Equity Loan

The original Help to Buy scheme closed to new applicants in October 2023, but if you already have a Help to Buy equity loan, you can still get assistance. The scheme provided government loans of up to 20% (40% in London) of the property value, interest-free for five years.

Shared Ownership

Shared ownership lets you buy a share of a property (typically 25-75%) and pay rent on the remaining portion. You can buy more shares over time (called "staircasing") until you own outright.

This scheme is particularly popular in expensive areas where outright purchase is difficult. However, consider the implications: you're still paying rent, service charges can be high, and selling can be more complicated.

Lifetime ISA (LISA)

The Lifetime ISA isn't a government scheme in the traditional sense, but it's specifically designed to help first-time buyers save for a deposit. You can contribute up to £4,000 per year, and the government adds a 25% bonus (£1,000 free annually if you max it out).

There are restrictions: you must be aged 18-39 to open one, can only use the funds for a first home or retirement, and the property must cost £450,000 or less (in England) or £200,000 or less (in Wales).

First Homes Scheme

The First Homes scheme offers newly built properties at a discount of at least 30% below market value. The discount is permanent—you sell at the same discount to the next first-time buyer. The scheme is administered through participating developers and local authorities.

Getting a Mortgage

Securing a mortgage is often the most stressful part of buying for first-timers. Here's what you need to know:

Mortgage Types Explained

• Fixed rate — Your interest rate stays the same for 2-5 years. Provides certainty but you might benefit if rates fall.
• Variable rate — Rate can go up or down. Cheaper initially but riskier.
• Tracker — Follows the Bank of England base rate plus a margin. Good if rates fall, bad if they rise.
• Offset — Your savings are offset against your mortgage, reducing interest. Useful if you have substantial savings.

Mortgage Broker vs Going Direct

Using a mortgage broker who has access to the whole market (whole-of-market) can help you find the best deal. Brokers often have access to exclusive products not available directly. Many charge no fee, as they receive commission from the lender.

However, you can also go directly to banks and building societies. If you have straightforward circumstances, this might be fine—just make sure you actually compare multiple lenders.

Documents You'll Need

Prepare these before applying:

• Proof of identity (passport, driving licence)
• Proof of address (utility bills, bank statements)
• Proof of income (payslips, SA302 for self-employed)
• Bank statements (typically 3-6 months)
• Proof of deposit (savings account statements)
• Details of existing debts

Credit Score

Lenders will check your credit history. Before applying, check your credit report for errors, pay off credit cards where possible, and avoid making any major financial changes (like taking out new loans) in the months before your mortgage application.

The Home-Buying Process

Once you're financially prepared, here's how buying a home actually works:

Step 1: Get a Mortgage Agreement in Principle

Before viewing properties, get an Agreement in Principle (AIP) or Decision in Principle (DIP). This is a statement from a lender saying roughly how much they'd be willing to lend you. Estate agents take it seriously—it shows you're a genuine buyer.

Step 2: View Properties

Start viewing. See as many properties as you can, even ones that might not be perfect. You'll learn what you actually want versus what you thought you wanted. Take photos and notes—you'll forget details otherwise.

Step 3: Make an Offer

When you find somewhere you like, make an offer through the estate agent. They'll ask how much you want to offer, whether it's conditional on anything (like a survey), and when you want to complete. Don't offer your maximum unless you're prepared to lose the property.

Step 4: Instruct a Solicitor

Once your offer is accepted, instruct a solicitor or conveyancer to handle the legal work. They'll handle searches, contracts, and the actual transfer of ownership. This typically takes 8-12 weeks in England and Wales.

Step 5: Survey and Mortgage

Arrange a mortgage valuation (the lender's requirement) and consider a RICS survey (your own assessment). Your solicitor will also run searches—checking for planning issues, flood risk, and other local concerns.

Step 6: Exchange Contracts

Once all checks are complete, you exchange contracts with the seller. This is legally binding—you're committed to buying. You'll pay your deposit (typically 10%) at this stage.

Step 7: Completion

On completion day, the remaining funds are transferred to the seller, and you get the keys. Congratulations—you're a homeowner!

Tips for First-Time Buyers

• Start saving early — The bigger your deposit, the better the mortgage deals you'll access
• Check your credit report — Fix any errors before applying for mortgages
• Get a Lifetime ISA — Free 25% government bonus on your savings
• Don't max out your borrowing — Just because a lender offers £200,000 doesn't mean you should borrow it all
• Use a broker — They'll find the best deal and handle the paperwork
• Be patient — The right property is worth waiting for
• Think long-term — Your first home doesn't have to be forever

Buying your first home is challenging, particularly in expensive areas. But with careful planning, realistic expectations, and an understanding of the support available, it's achievable. The key is to start early, save consistently, and get professional help when you need it.