First Time Buyer Guide UK: What You Need to Know
This first time buyer guide UK covers everything you need to buy your first home in 2026, from saving your deposit to picking up the keys. It applies across England and Scotland, with clear notes where the rules differ between the two.
Table of Contents
Who this guide is for
This guide is written for anyone buying their first home in the UK in 2026. Whether you are saving your deposit now, already speaking to mortgage brokers, or somewhere in between, it walks you through the full process in plain terms.
It covers England and Scotland in detail. Wales and Northern Ireland have their own devolved rules for land transaction taxes and some government schemes, so where those differences matter we flag them clearly. The main sections on mortgages, deposits, and the buying process apply across the whole of the UK.
Property prices, scheme thresholds, and stamp duty rules have all been updated to reflect what is in place as of July 2026. If you are using this guide to plan your purchase, use it as a starting point and confirm the specific figures with your solicitor or mortgage adviser before you commit to anything.
How much deposit do you actually need
The minimum deposit for most residential mortgages in the UK is 5% of the purchase price. On a £250,000 property that is £12,500. Most lenders will accept 5%, but the interest rates available at that level are significantly higher than what you get at 10% or 15%, so the actual cost of a small deposit is often larger than buyers realise.
At 10% deposit you unlock a much wider range of lenders and more competitive rates. At 15% to 20% the rates improve again, and you reduce the overall amount you are borrowing. The difference in monthly repayments between a 5% and a 15% deposit on the same property can be £150 to £250 per month depending on the rate, so it is worth saving for longer if your circumstances allow it.
In England, the average first time buyer property price is currently around £225,000 to £275,000 depending on region, which means a 10% deposit sits between £22,500 and £27,500. In London the average is substantially higher, often above £450,000, making a 10% deposit £45,000 or more. In Scotland, average first time buyer prices are lower, typically in the £140,000 to £180,000 range outside Edinburgh, so a 10% deposit is more achievable at around £14,000 to £18,000.
Gifted deposits from family are accepted by most lenders, but the person gifting must sign a letter confirming it is a gift and not a loan. Your mortgage lender will ask for this. If you are saving your deposit yourself, a Cash ISA or Lifetime ISA (covered below) is worth considering. You can read more about how Cash ISAs work in our Cash ISA guide.
Understanding mortgage types for first time buyers
The two main mortgage types you will encounter as a first time buyer are fixed rate and tracker (variable rate). Most first time buyers in 2026 opt for a fixed rate, and for good reason: your monthly payment stays the same for the fixed term, making budgeting straightforward.
Fixed rate mortgages are available in two-year, three-year, and five-year terms as standard, with some lenders now offering ten-year fixes. At the end of your fixed term you move onto the lender’s standard variable rate (SVR), which is almost always higher. The standard move at that point is to remortgage. In July 2026, two-year fixed rates for first time buyers with a 10% deposit are broadly in the 4.2% to 4.8% range; five-year fixes sit slightly lower at around 4.0% to 4.5%, as lenders price in expected base rate movement over a longer term.
Tracker mortgages follow the Bank of England base rate plus a set margin, so your payment goes up or down when the base rate changes. They carry more risk but can work out cheaper if rates fall during your term. As of July 2026, the Bank of England base rate is 4.25%, and many trackers are priced at base rate plus 0.5% to 1%, putting them broadly in line with or slightly below short-term fixes. If you expect rates to fall further, a tracker has some appeal, but it comes with payment uncertainty.
Repayment mortgages pay off both interest and capital each month, so you own the property outright at the end of the term. Interest-only mortgages only cover the interest, leaving the full capital to repay at the end. Interest-only is very rarely available to first time buyers without substantial assets, so repayment is almost certainly what you will be offered and what you should take.
Mortgage terms are typically 25 to 35 years. A longer term reduces your monthly payment but increases total interest paid. Using a broker, rather than going directly to one lender, almost always gets you a better deal because they can compare the whole market.
Government schemes explained
Lifetime ISA
The Lifetime ISA (LISA) is the most useful government scheme for most first time buyers saving a deposit. You can open one if you are aged 18 to 39, and you can save up to £4,000 per tax year into it. The government adds a 25% bonus on top of whatever you save, up to £1,000 per year. Over five years of maximum contributions, that is £5,000 in free government money.
To use the LISA for a property purchase, the home must cost £450,000 or less. You must have held the account for at least 12 months before using it to buy. The LISA is available across the whole of the UK, including Scotland. If you withdraw for any reason other than buying a first home or retirement (from age 60), you pay a 25% withdrawal penalty, which effectively claws back the bonus and takes a small slice of your own savings too. This applies in full as of July 2026. Open a LISA as early as possible, even if you only put in a small amount initially, to start the 12-month clock.
Mortgage Guarantee Scheme
The Mortgage Guarantee Scheme allows lenders to offer 95% LTV (loan-to-value) mortgages backed by a partial government guarantee. This helps buyers who only have a 5% deposit access mortgages that some lenders would not otherwise offer at that level. It is available in England, Scotland, and Wales. As of July 2026, the scheme has been extended and remains open to new applications. It applies to properties up to £600,000 and is available to first time buyers and home movers alike. You do not apply for this scheme directly; your mortgage lender participates in it, so you simply apply for a 95% mortgage as normal and they handle the rest. Not all lenders participate, so ask your broker which ones do.
Shared Ownership
Shared Ownership lets you buy a share of a property, typically between 10% and 75%, and pay rent on the portion you do not own. You only need a deposit on the share you are buying, which makes it more accessible in high-price areas. Over time you can buy more shares in a process called staircasing, eventually owning 100% if you choose.
In England, Shared Ownership properties are provided through housing associations and you can search for them on the Own Your Home government website. In Scotland, the equivalent scheme is called the Low Cost Initiative for First Time Buyers (LIFT), which operates differently: it provides an equity stake from the Scottish Government rather than a split ownership structure. If you are buying in Scotland, check the LIFT scheme via mygov.scot rather than looking for standard Shared Ownership properties. The key limitation of Shared Ownership in England is that you pay rent on the unowned portion on top of your mortgage, and that rent can increase annually. Run the full monthly cost calculation before committing.
Stamp duty relief for first time buyers
Stamp duty land tax (SDLT) in England changed significantly from 1 April 2025, when the temporary thresholds introduced in 2022 reverted. As a first time buyer in England purchasing in July 2026, the current thresholds are as follows. You pay no SDLT on the first £300,000 of the purchase price. On the portion between £300,001 and £500,000, you pay 5%. If the property costs more than £500,000, you do not qualify for first time buyer relief and standard rates apply from the first pound. On a £300,000 property you pay no stamp duty at all. On a £400,000 property you pay 5% on £100,000, which is £5,000.
In Scotland, the equivalent tax is Land and Buildings Transaction Tax (LBTT). First time buyers in Scotland receive a relief that raises the nil-rate threshold from £145,000 to £175,000. On the portion from £175,001 to £250,000 you pay 2%, and from £250,001 to £325,000 you pay 5%. On a £200,000 property in Scotland, a first time buyer pays 2% on £25,000, which is £500. On a £175,000 property you pay nothing. The saving compared to a non-first-time buyer is modest in Scotland because the standard nil-rate threshold is £145,000, but the relief is still worth understanding when budgeting.
Neither England nor Scotland charge stamp duty or LBTT on the purchase of a property below their respective nil-rate thresholds, and both offer meaningful relief in the lower-to-mid price ranges most common for first time buyers outside London and Edinburgh.
The buying process step by step
Step 1: Get a mortgage in principle
Before you start viewing properties, get a mortgage in principle (MIP), also called an agreement in principle or decision in principle depending on the lender. This is a conditional statement from a lender confirming roughly how much they will lend you, based on a soft or hard credit check. Most estate agents will expect you to have one before they take an offer seriously. It takes 15 to 30 minutes with a broker or directly with a lender.
Step 2: Find a property and make an offer
Once you have your MIP, you can make offers with confidence. In England, an accepted offer is not legally binding until contracts are exchanged, which means either side can withdraw without penalty up until that point. In Scotland, the process is different: offers are made through a solicitor, and once an offer is accepted and “missives” are concluded (a series of formal letters between solicitors), the contract becomes legally binding significantly earlier in the process than in England.
Step 3: Instruct a solicitor and apply for your mortgage
Once an offer is accepted, instruct a conveyancing solicitor or licensed conveyancer immediately. In Scotland you will likely already have a solicitor involved at the offer stage. At the same time, submit your full mortgage application. Your lender will instruct a surveyor to value the property, and you can commission a more detailed survey separately, which is strongly recommended for older properties.
Step 4: Conveyancing and searches
Your solicitor carries out searches against the property, including local authority searches, drainage searches, and environmental checks. These identify issues such as planning permissions nearby, flood risk, or highway adoptions that affect the land. This stage typically takes four to twelve weeks and is frequently the longest part of the process. Chase your solicitor regularly for updates.
Step 5: Exchange and completion
In England, exchange of contracts is when the sale becomes legally binding. You pay your deposit at this point (transferred to your solicitor), and a completion date is agreed. Completion usually follows one to four weeks later: this is the day the remaining funds transfer and you collect the keys. In Scotland, legal binding happens at conclusion of missives (earlier in the process), and the equivalent of completion is called the date of entry.
Hidden costs first time buyers miss
Beyond your deposit, budget for solicitor or conveyancing fees of £1,200 to £2,500 including searches and Land Registry fees. This varies by property price and solicitor. Get at least three quotes, but do not choose purely on price: a slow or unresponsive solicitor can cost you a sale.
A mortgage valuation is usually included in your mortgage product or charged at £150 to £300. A Homebuyer Survey (Level 2) costs roughly £400 to £700 and gives you a clearer picture of the property’s condition. A full structural survey (Level 3) costs £600 to £1,500 and is worth it for older or unusual properties. Skipping a survey is one of the most common mistakes buyers make.
Removal costs for a one or two-bedroom property typically run £300 to £900 depending on distance and how much you have. Buildings insurance must be in place from exchange of contracts in England, and from conclusion of missives in Scotland. Budget around £150 to £300 per year for a standard property. Mortgage arrangement fees, where they apply, can be up to £1,000 and are either paid upfront or added to the loan (adding them to the loan means you pay interest on them for the full term).
As a rough total: on a £250,000 purchase in England with a 10% deposit, budget an additional £3,500 to £6,000 on top of your deposit to cover all buying costs, excluding stamp duty if that applies.
Common mistakes and how to avoid them
The biggest mistake is overestimating what you can comfortably afford. Lenders will offer you more than you should necessarily borrow. Work out what monthly repayment you can genuinely absorb if your circumstances change, and use that to set your price ceiling, not the maximum the lender will give you.
Not using a broker is another costly error. Going directly to one bank means you see one set of rates. A whole-of-market broker sees hundreds. The difference in rate on a £200,000 mortgage over five years can easily be £3,000 to £5,000. Most brokers charge a flat fee of £300 to £500, or nothing if they are paid by lender commission, making it straightforward value.
Ignoring your credit report before applying is common and avoidable. Check your Experian, Equifax, and TransUnion reports at least three to six months before you plan to apply. Errors are more common than people expect, and fixing one takes time. Paying down credit card balances below 30% utilisation, and closing unused credit accounts, can improve your score before your application lands.
In Scotland specifically, buyers sometimes underestimate the speed required. Because the legal process moves faster once an offer is accepted, you need your solicitor instructed and your finances ready before you start making offers. Trying to arrange these after an offer is accepted is too late.
Finally, do not skip the survey to save money. A £500 survey that reveals £8,000 of remedial work gives you the power to renegotiate or walk away. Finding out after completion is far more expensive.
Frequently asked questions
Can I use a Lifetime ISA to buy a property in Scotland?
Yes. The Lifetime ISA is a UK-wide product and can be used to purchase a first home anywhere in the UK, including Scotland, as long as the property costs £450,000 or less and you have held the account for at least 12 months.
What counts as a first time buyer for stamp duty purposes in England?
You are a first time buyer for SDLT relief purposes if you have never previously owned a residential property anywhere in the world, either solely or jointly. If you are buying with someone who has owned before, neither of you qualifies for first time buyer relief.
How long does it take to buy a house in the UK?
In England, the average time from offer accepted to completion is 12 to 16 weeks, though it can stretch to 20 weeks or more in complex chains. In Scotland, the process from offer to date of entry is typically faster once missives are concluded, often eight to twelve weeks, because the legal binding point comes earlier.
Is a 5% deposit mortgage a good idea?
It gets you on the ladder sooner, but the mortgage rate at 95% LTV is noticeably higher than at 90% or 85% LTV. If you can save for six to twelve more months to reach 10% deposit, the rate improvement often saves you more money over your fixed term than the additional rent you pay while saving. Run the numbers for your specific situation with a broker.
What is the difference between exchange and completion in England?
Exchange is when the sale becomes legally binding: both sides sign identical contracts and your solicitor transfers them. Completion is when the money moves and you get the keys. These usually happen one to four weeks apart. You cannot pull out after exchange without losing your deposit and potentially facing legal action.
Buying your first home is one of the largest financial decisions you will make, and the process has more moving parts than most people expect. Use this guide as your reference point, take advice from a qualified mortgage broker and solicitor, and go in with your paperwork and finances ready before you start viewing.
DashLink is not authorised or regulated by the Financial Conduct Authority. This article is for general information only and does not constitute financial, investment or tax advice, or a personal recommendation. Tax treatment depends on your individual circumstances and rules can change. If you are unsure whether a product or course of action is right for you, speak to a regulated independent financial adviser.
