How to Buy a House: First-Time Buyer UK
By Mustafa Bilgic (MB) • Last updated: February 2026 • 12 min read
Contents
Buying your first home is one of the biggest financial decisions you will ever make. The UK property buying process involves multiple steps, legal processes, and a cast of professionals from mortgage brokers to solicitors. This comprehensive guide walks you through every stage, explains the costs involved, and highlights the government help available to first-time buyers in 2025.
The 10 Steps to Buying Your First Home
Your deposit is the single biggest barrier for most first-time buyers. Lenders in the UK require a minimum deposit of 5% of the property purchase price, though 10% gives you access to more competitive mortgage deals and 20% or more unlocks the best rates available.
On a typical UK first-time buyer property priced at £250,000, a 5% deposit is £12,500 and a 10% deposit is £25,000. The higher your deposit, the lower your loan-to-value (LTV) ratio, and the lower the interest rate you are likely to be offered.
Best ways to save a deposit: Lifetime ISA (25% government bonus on up to £4,000/year), Help to Buy ISA (closed to new applicants), regular savings accounts, cutting discretionary spending, and avoiding lifestyle inflation.
Mortgage lenders scrutinise your credit history before making an offer. A strong credit score increases your chances of approval and helps you access lower interest rates. Before applying, check your credit report with Experian, Equifax, and TransUnion — all three offer free reports.
How to improve your credit score:
- Register on the electoral roll at your current address
- Pay all bills on time (set up direct debits)
- Reduce existing credit card balances below 30% of your limit
- Avoid making multiple credit applications in a short period
- Close unused credit accounts
- Check for errors and dispute any inaccuracies
Allow at least 3–6 months to meaningfully improve your score before applying for a mortgage.
A mortgage in principle (MIP), also called an agreement in principle (AIP) or decision in principle (DIP), is a lender's conditional statement of how much they will lend you. It is not a formal mortgage offer but signals to sellers that you are a credible buyer.
You can get a mortgage in principle directly from a lender or through a mortgage broker. A good broker will search the whole market and can often access exclusive deals not available on the high street. Broker fees vary — some charge a flat fee (typically £300–£500) while others are fee-free and earn commission from the lender.
Mortgage affordability is typically calculated at 4–4.5 times your annual income, though some lenders offer up to 5.5 times for professionals. Joint buyers use combined income.
| Annual Income | 4x Multiplier | 4.5x Multiplier | 5x Multiplier |
|---|---|---|---|
| £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 |
Once you know your budget, the property search begins. Use portals such as Rightmove, Zoopla, and OnTheMarket to search listings. Register with local estate agents who can alert you to new properties before they appear online.
Key considerations when viewing properties:
- Location: Transport links, schools, local amenities, future development plans
- Property condition: Age of boiler, roof condition, evidence of damp or subsidence
- Leasehold vs freehold: Leasehold properties come with service charges and ground rent obligations
- EPC rating: Energy efficiency affects running costs and future mortgage availability
- Parking and storage: Essential for practicality
- Mobile signal and broadband: Vital for remote workers
View each property at least twice, at different times of day, before making an offer.
When you find a property you want, submit your offer through the estate agent. In England and Wales, an offer is not legally binding until exchange of contracts. You can negotiate — start slightly below the asking price unless the market is very competitive.
When making an offer, state:
- Your offered price
- That you are a first-time buyer with no chain
- Proof of your mortgage in principle
- Confirmation of your deposit amount
- Your preferred completion timeline
The seller may accept, reject, or counter-offer. Negotiate calmly and be prepared to walk away if the price does not meet your valuation.
Once your offer is accepted, you need to instruct a conveyancing solicitor or licensed conveyancer to handle the legal transfer of ownership. This process is called conveyancing and typically takes 8–12 weeks.
Your solicitor will:
- Conduct searches (local authority, water and drainage, environmental)
- Review the seller's contract and title documents
- Raise pre-contract enquiries with the seller's solicitor
- Check the property is free from legal issues (restrictive covenants, rights of way)
- Report their findings to you before exchange
- Transfer funds on completion and register the title at the Land Registry
Conveyancing fees typically range from £800 to £1,800 inclusive of disbursements (searches, Land Registry fees, etc.). Get at least three quotes and check reviews on TrustPilot or the Law Society's website.
A survey inspects the physical condition of the property. The mortgage lender will carry out their own valuation (which you often pay for) but this only confirms the property is worth what you are paying — it does not check for defects. You should commission a separate survey.
| Survey Type | Cost (approx) | Best For |
|---|---|---|
| RICS Condition Report (Level 1) | £250–£400 | New builds, modern properties |
| RICS HomeBuyer Report (Level 2) | £400–£800 | Conventional properties in reasonable condition |
| RICS Building Survey (Level 3) | £600–£1,500 | Older, larger, or unusual properties |
If the survey reveals significant defects, you can renegotiate the price, ask the seller to fix the issues before completion, or withdraw from the purchase entirely (before exchange, at no legal cost).
Exchange of contracts is the point at which the sale becomes legally binding. Both parties sign identical contracts and they are physically or electronically exchanged between solicitors. At this point you pay your deposit — usually 10% of the purchase price — to your solicitor who holds it until completion.
Before exchange, make sure you have:
- Received and signed your formal mortgage offer
- Agreed a completion date with the seller
- Arranged buildings insurance to start from exchange (your mortgage lender will require it)
- Reviewed and signed the contract
- Transferred your deposit to your solicitor
Completion is the day you become the legal owner of the property. Your solicitor transfers the remaining purchase funds to the seller's solicitor. Once funds are received, the estate agent releases the keys. Your solicitor then registers the transfer of ownership at HMRC (for stamp duty) and at the Land Registry.
What happens on completion day:
- Your mortgage lender releases the loan funds to your solicitor
- Your solicitor transfers the total purchase price to the seller
- The seller vacates the property
- The estate agent contacts you to collect the keys
- Your solicitor submits the SDLT return and pays any stamp duty due
With the keys in hand, it is time to move in. Plan your moving day carefully to minimise stress. Key tasks include:
- Book a removal company or van hire well in advance (especially for end-of-month completions when demand is highest)
- Redirect your post with Royal Mail (costs around £33 for 3 months)
- Notify DVLA, HMRC, your bank, GP, dentist, employer, and all subscriptions of your new address
- Read all utility meters on your first day and contact suppliers
- Check the boiler, stop cock, and consumer unit (fuse box) locations
- Change the locks for security
First-Time Buyer Reliefs and Government Schemes
Stamp Duty Land Tax (SDLT) Relief
First-time buyers in England pay no stamp duty on the first £300,000 of a property's value (from 1 April 2025). On properties valued between £300,001 and £500,000, a 5% rate applies on the portion above £300,000. Properties above £500,000 do not qualify for first-time buyer relief and standard rates apply. This compares to the temporary threshold of £425,000 that applied until 31 March 2025.
| Property Price | Stamp Duty (FTB, from April 2025) |
|---|---|
| Up to £300,000 | £0 |
| £350,000 | £2,500 (5% on £50,000) |
| £400,000 | £5,000 (5% on £100,000) |
| £450,000 | £7,500 (5% on £150,000) |
| £500,000 | £10,000 (5% on £200,000) |
| Above £500,000 | Standard rates apply (no FTB relief) |
Lifetime ISA (LISA)
The Lifetime ISA allows you to save up to £4,000 per year and receive a 25% government bonus (up to £1,000 per year). You can use it to buy a first home worth up to £450,000. To be eligible you must be aged 18–39 when you open it and have held the account for at least 12 months before using it for a property purchase. If you withdraw the money for any other reason before age 60, a 25% withdrawal charge applies (which effectively claws back the bonus plus a penalty).
Shared Ownership
Shared Ownership lets you buy between 10% and 75% of a home and pay subsidised rent on the remaining share, which is owned by a housing association. You need a much smaller deposit (based on your purchased share only) and can increase your ownership over time through staircasing. Eligibility criteria apply — household income must not exceed £80,000 (£90,000 in London). Note that you will pay both a mortgage and rent simultaneously.
First Homes Scheme
The First Homes scheme offers new-build homes to first-time buyers, key workers, and local people at a discount of at least 30% (and sometimes 40–50%) below market value. The discount is permanent and must be passed on when the property is sold. Local councils can set additional eligibility criteria based on local connection, income, or occupation.
Mortgage Guarantee Scheme
The UK government's Mortgage Guarantee Scheme supports lenders to offer 95% LTV mortgages (5% deposit) on properties up to £600,000. This makes it easier for buyers with smaller deposits to access competitive rates. The scheme runs until June 2025.
Total Buying Costs: What to Budget For
Beyond the deposit and purchase price, buying a home involves a range of additional costs that first-time buyers often underestimate.
| Cost | Typical Range | Notes |
|---|---|---|
| Stamp Duty | £0–£10,000 | Zero on properties up to £300,000 (FTB, from April 2025) |
| Conveyancing | £800–£1,800 | Includes searches, Land Registry, legal fees |
| Survey | £250–£1,500 | Level 2 HomeBuyer recommended for most buyers |
| Mortgage Arrangement Fee | £0–£1,999 | Can sometimes be added to mortgage (interest applies) |
| Mortgage Valuation | £150–£400 | Sometimes free with lender deals |
| Broker Fee | £0–£500 | Fee-free brokers earn commission from lenders |
| Removals | £300–£1,500 | Depends on volume and distance |
| Buildings Insurance | £150–£400/yr | Required from exchange of contracts |
| Initial Furnishing/Repairs | £1,000–£5,000 | Budget for at least minor works |
Understanding the Mortgage Market
The UK mortgage market offers several types of mortgage, each with different risk profiles and costs.
| Mortgage Type | How It Works | Best For |
|---|---|---|
| Fixed Rate (2 or 5 year) | Interest rate locked for the fixed term | Budgeting certainty, rate protection |
| Tracker Mortgage | Rate tracks the Bank of England base rate + margin | When rates expected to fall |
| Discount Variable | Set below lender's standard variable rate (SVR) | Short-term flexibility |
| Standard Variable Rate | Lender sets rate, can change anytime | No penalties for overpayment/switching |
| Offset Mortgage | Savings offset against mortgage balance | High savers wanting to reduce interest |
Most first-time buyers choose a 2 or 5-year fixed rate mortgage for payment certainty. At the end of the fixed term, you should remortgage to avoid being moved onto the usually higher SVR.
Common First-Time Buyer Mistakes to Avoid
- Skipping the survey: A survey can reveal thousands of pounds of hidden defects. Always get one.
- Ignoring additional costs: Many buyers deplete their savings on the deposit and cannot afford legal fees, surveys, and moving costs.
- Not checking the leasehold terms: Short leases (below 80 years), high service charges, and escalating ground rent can make a property difficult to sell and remortgage.
- Underestimating conveyancing time: Slow searches, complex chains, and missing documents regularly push timelines beyond 3 months.
- Stretching to maximum borrowing: Mortgage rates change at renewal. Make sure repayments are affordable at 2–3% higher rates.
- Making major purchases on credit before completion: Large credit commitments between mortgage application and completion can cause your offer to be withdrawn.
Leasehold vs Freehold: What First-Time Buyers Need to Know
When buying a property in the UK you will either own the freehold (you own the building and land outright) or a leasehold (you own the right to occupy the property for the remaining years on the lease).
Most houses are sold freehold. Most flats are sold leasehold. Key considerations for leasehold properties:
- Lease length: Anything below 80 years remaining is expensive to extend and makes mortgaging difficult
- Service charges: Annual charges for building maintenance, insurance, and communal areas. Can be £500–£5,000+ per year
- Ground rent: Fixed payment to the freeholder. New leases must have zero ground rent under the Leasehold Reform (Ground Rent) Act 2022
- Major works: You can be charged thousands for building works required by the freeholder