First-Time Buyer Complete Guide: From Saving to Keys

How Much Do You Actually Need to Save?

Most first-time buyers need at least a 5–10% deposit, but 10–15% gives you access to significantly better mortgage rates. On a £250,000 property, a 5% deposit is £12,500 but a 10% deposit (£25,000) could save you £50–£100/month in mortgage payments due to a better interest rate. Beyond the deposit, budget separately for: Stamp Duty Land Tax (0% up to £300,000 for first-time buyers on properties up to £500,000), solicitor/conveyancer fees (£1,000–2,500), mortgage product fee (£0–1,999, can often be added to the mortgage), survey (£300–800), buildings insurance (from completion day), removals (£300–1,500), and immediate home costs like appliances or decorating. Total non-deposit costs are typically £3,000–7,000.

"Most first-time buyers need at least a 5–10% deposit, but 10–15% gives you access to significantly better mortgage rates"

The Lifetime ISA: Free Government Money

If you are between 18 and 39 and have not bought a home before, a Lifetime ISA is one of the best tools available. You can save up to £4,000 per year into a LISA and the government adds a 25% bonus — up to £1,000 per year in free money. The bonus is paid monthly. Invest in a Stocks and Shares LISA for higher long-term growth if your purchase is 5+ years away; use a Cash LISA if you are buying within 2–3 years. The property must cost £450,000 or less, and you must have held the LISA for at least 12 months before using it. If two first-time buyers are buying together, both can use their LISA — doubling the bonus. The LISA is in addition to the regular £20,000 ISA allowance.

How Mortgage Affordability Is Assessed

Lenders do not simply divide property price by salary. They apply an income multiple (typically 4–4.5 times gross annual income, though some lenders go to 5–5.5 times for higher earners) and then stress-test affordability by checking whether you could still afford the payments if rates rose by 2–3%. They also look at your monthly outgoings: existing debt repayments, subscriptions, dependants, and committed spending. Your credit score and history are checked — missed payments, high credit utilisation, or recent credit applications all reduce your chances of approval or push you toward higher rates. Lenders will usually require at least 3 months of payslips and bank statements, plus your last 2 years of accounts if self-employed.

Choosing Your Mortgage

For most first-time buyers, a fixed-rate mortgage is the right choice — it gives payment certainty for 2 or 5 years. Two-year fixes offer the lowest initial rate but need remortgaging sooner. Five-year fixes cost slightly more but give longer-term security. Use a whole-of-market broker rather than going direct to a bank. Brokers have access to deals not directly available and can often secure better rates. Most charge nothing to you — they receive a fee from the lender. Habito, London & Country, and Trussle are all whole-of-market online brokers. A Decision in Principle (also called Agreement in Principle) is a soft-check indication from a lender of how much they would lend — get this before seriously viewing properties.

"For most first-time buyers, a fixed-rate mortgage is the right choice — it gives payment certainty for 2 or 5 years"

The Offer and the Legal Process

When you find a property you want, make an offer through the estate agent. In England and Wales, offers are not legally binding until exchange of contracts. Once your offer is accepted, instruct a conveyancing solicitor immediately — they handle the legal transfer of ownership. Your solicitor will carry out searches (local authority, environmental, water), review the seller's pack, raise enquiries about anything unusual, and arrange exchange and completion. Exchange of contracts is when both parties become legally bound to complete the purchase — you pay your deposit at this point and agree a completion date. Completion is when money transfers and you receive the keys. The average time from accepted offer to completion is 10–14 weeks in England and Wales.

Surveys: Which One Do You Need?

Three main survey types exist. A basic Mortgage Valuation (usually arranged by the lender) simply confirms the property is worth what you are paying — it is not a survey for your benefit and will not reveal problems. A Homebuyer Report (RICS Level 2, £400–600) identifies obvious defects, structural concerns, and issues that could affect value. A Full Structural Survey (RICS Level 3, £600–1,500) is a comprehensive investigation of every accessible part of the property — recommended for older properties, listed buildings, unusual construction, or any property where you have concerns. For a new build, a snagging inspection by a specialist can identify dozens of minor defects while the developer is still obligated to fix them.

First-Time Buyer Stamp Duty Relief

From April 2025, the standard SDLT first-time buyer relief applies: 0% on the first £300,000, 5% on the portion from £300,001 to £500,000. For a property priced at £450,000, a first-time buyer pays SDLT of £7,500 (5% on the £150,000 between £300k and £450k). The relief only applies to properties costing £500,000 or less — a property at £505,000 attracts the full standard rates with no first-time buyer relief at all, making the threshold a meaningful cliff. If buying as joint owners where one party has previously owned a home, the first-time buyer relief is lost completely. Use HMRC's official calculator to get the exact figure for any property price.

"For a property priced at £450,000, a first-time buyer pays SDLT of £7,500 (5% on the £150,000 between £300k and £450k)"

What to Do After You Have the Keys

On completion day, your solicitor transfers funds and the estate agent releases the keys. From this moment you are responsible for the property. Before moving in: ensure buildings insurance was in place from exchange (not completion), change all locks, locate the fuse box, water stopcock, and gas meter, and take meter readings to register with utility suppliers. Register with the Land Registry (your solicitor handles this) and update your address everywhere. Within 14 days, your solicitor will file and pay your Stamp Duty return. Within 30 days, insure the property contents. Set up a mortgage direct debit immediately. And finally — it is worth taking a breath. Buying a home is the biggest financial transaction most people make. It is normal for it to feel overwhelming.