UK First-Time Buyer Complete Guide 2026/27
UK first-time buyer guide 2026/27: SDLT relief to £500,000, Lifetime ISA and Help to Buy ISA rules, borrowing, buying costs and the steps from offer to keys.
The steps from saving to keys
- Save a deposit - see the savings options below
- Get a mortgage agreement in principle - shows sellers and agents what you can borrow
- Search and view
- Make an offer
- Mortgage application, valuation and survey
- Conveyancing and searches
- Exchange contracts - the purchase becomes legally binding
- Completion - the money is transferred and you get the keys
Saving the deposit
Lifetime ISA
For people aged 18 to 39 buying a first home costing £450,000 or less (rules from GOV.UK):
- Open from 18 to 39; pay in until you are 50
- Up to £4,000 a year, counted within the £20,000 ISA allowance
- 25% government bonus, up to £1,000 a year
- Use it for a first home (bought with a mortgage, at least 12 months after your first payment) or from age 60
- Any other withdrawal loses 25% of the amount withdrawn: £1,000 (£800 saved plus £200 bonus) returns £750
Over 5 years at £4,000 a year: £20,000 paid in plus £5,000 of bonus, before interest or investment growth.
Cash ISA
Interest in an ISA is tax-free. The overall ISA allowance is £20,000 in 2026/27, shared across all your ISAs including a Lifetime ISA.
Stocks and shares ISA
Investments can fall as well as rise, which makes them riskier for money you expect to need within a few years.
Pensions
Pension savings cannot normally be taken before 55 (57 from 6 April 2028), so they cannot fund a deposit.
SDLT for first-time buyers (England and Northern Ireland)
| Portion of price | First-time buyer rate | Standard rate (main home) |
|---|---|---|
| Up to £300,000 | 0% | 0% to £125,000; 2% to £250,000; 5% above |
| £300,001 to £500,000 | 5% | 5% |
| Price over £500,000 | No relief - standard rates on the whole price | 5% to £925,000; 10% to £1,500,000; 12% above |
Worked examples (2026/27, computed by our SDLT calculator): £250,000: first-time buyer £0, other buyer of a main home £2,500. £400,000: first-time buyer £5,000, other buyer of a main home £10,000. £550,000: first-time buyer £17,500 (relief not available), other buyer of a main home £17,500.
Scotland uses Land and Buildings Transaction Tax - see the LBTT calculator. Wales uses Land Transaction Tax - see the LTT calculator.
Borrowing
- Affordability: lenders assess income, committed spending and the impact of likely future rate rises (FCA MCOB 11.6)
- Income multiples: many lenders also cap the loan as a multiple of income; the multiple varies by lender and applicant
- Loan to value: the deposit sets the loan-to-value band and the products available
Illustration: £50,000 salary, 10% deposit
| Income multiple | Loan | Price with a 10% deposit |
|---|---|---|
| 4 times | £200,000 | £222,222 |
| 4.5 times | £225,000 | £250,000 |
| 5 times | £250,000 | £277,778 |
Costs beyond the deposit
- SDLT, LBTT or LTT, if any
- Conveyancing fees and searches
- Survey (the type depends on the age and condition of the property)
- Mortgage arrangement, booking or valuation fees, if the product has them
- Buildings insurance, often required by the lender from exchange
- Removals and initial furnishing
Get written quotes. Prices vary too much by area, property and provider for a typical figure to be useful.
Common mistakes
- Borrowing the maximum offered. Leave room for rate rises and changes in income.
- Overlooking leasehold costs. Check service charges, ground rent and the lease length before committing.
- Skipping a survey on an older property. The lender's valuation is not a survey.
- Spending every penny on the deposit and fees. Keep a buffer for repairs after you move in.
- Missing the Lifetime ISA conditions. The 12-month rule, the £450,000 cap and the mortgage requirement must all be met, or the 25% charge applies.
Related pages
- Mortgage Affordability Calculator
- SDLT (Stamp Duty) Calculator - England + NI
- LBTT Calculator - Scotland
- LTT Calculator - Wales
- UK ISA Types Guide
- UK Cost of Living by City
- UK Salary Calculator
Frequently asked questions
How much deposit do I need as a first-time buyer?
Lenders set their own minimums, and many products need at least 5% of the price; a bigger deposit (a lower loan-to-value) usually gives access to more products and lower rates. On a £250,000 home, 5% is £12,500 (a 95% loan-to-value mortgage), 10% is £25,000 and 15% is £37,500. Compare actual quotes rather than relying on typical rate gaps.
What is the Lifetime ISA and should I open one?
You can open a Lifetime ISA if you are 18 or over but under 40, and pay in up to £4,000 a year until you are 50. The government adds a 25% bonus, up to £1,000 a year, and the £4,000 counts towards the £20,000 ISA allowance. £4,000 a year for 5 years is £20,000 paid in plus £5,000 of bonus. For a first home the property must cost £450,000 or less, you must buy at least 12 months after your first payment, use a conveyancer, and buy with a mortgage. Other withdrawals before 60 lose 25% of the amount taken, which costs more than the bonus.
How much can I borrow as a first-time buyer?
Lenders decide by assessing your income and spending, and FCA rules require them to take account of likely future interest rate rises (MCOB 11.6). Many express a limit as a multiple of income. As an illustration, on a £50,000 salary: 4 times is £200,000, 4.5 times £225,000 and 5 times £250,000. The multiple you are offered depends on the lender and your circumstances. Use our mortgage affordability calculator to model your case.
What is first-time buyer relief from Stamp Duty Land Tax?
In England and Northern Ireland, first-time buyers pay no SDLT up to £300,000 and 5% on the portion from £300,001 to £500,000. Above £500,000 the relief cannot be claimed and the standard rates apply to the whole price. You and anyone buying with you must be first-time buyers. Scotland (LBTT) and Wales (LTT) have their own taxes and reliefs.
What costs are there beyond the deposit?
Typically: SDLT (if any), conveyancing fees and searches, a survey, any mortgage arrangement or valuation fee, buildings insurance from exchange if the lender requires it, and moving costs. Prices vary widely by property, area and provider, so get written quotes; we do not publish typical figures we cannot source.
How long does buying take?
It varies with the chain, the mortgage application, the survey and how quickly searches and legal enquiries come back. A purchase with no chain usually has fewer points where it can stall. Ask your conveyancer for an estimate for your purchase.
Should I choose a fixed-rate or a tracker mortgage?
A fixed rate keeps payments the same for the fixed period; a tracker moves with Bank Rate, so payments can rise or fall. Consider how much a payment rise you could absorb, the early repayment charges on each product and the total cost over the deal period. Rates change frequently, so compare live quotes.
What is the mortgage affordability stress test?
FCA rules require a lender to be satisfied that you can afford the mortgage, taking account of your income and committed and basic spending and, for a lender, the impact of likely future interest rate increases (MCOB 11.6). How each lender tests this, and the evidence of income it asks for, differs between lenders.
Can I use a Help to Buy ISA for my deposit?
Only if you already have one: you can no longer open a Help to Buy ISA. Existing holders can pay in up to £200 a month until November 2029 and claim the 25% bonus (up to £3,000) until November 2030. The home must cost up to £250,000 (up to £450,000 in London), be the only home you own and be where you intend to live. If you also have a Lifetime ISA, you can use the bonus from only one of them for your first home.
How long might it take to save a deposit?
Illustration: on a £45,000 salary in England, take-home pay in 2026/27 is £35,920. Saving £750 a month is £9,000 a year; with £4,000 of it in a Lifetime ISA the bonus adds £1,000, so £10,000 a year before interest. A £25,000 deposit would take about 2.5 years at that rate.