Guide · United Kingdom
UK First-Time Home Buyer Guide: From Budget to Key Exchange
Last updated 2026-06-27 · Published 2026-06-27
A complete step-by-step guide for first-time buyers in the UK. Learn about deposit requirements, stamp duty relief, credit checks, and getting a mortgage agreement in principle.
1. Saving a Deposit and Budgeting
The first hurdle for any first-time buyer is saving a deposit. In the UK, the absolute minimum deposit required is usually 5% of the purchase price, but saving 10% or 15% unlocks substantially lower interest rates.
Keep in mind that you will also need cash for upfront fees, including solicitors' fees, survey costs, mortgage arrangement fees, and moving expenses. Aim to save at least £2,000 to £3,000 on top of your deposit to cover these transaction costs.
2. First-Time Buyer Stamp Duty Relief
In England and Northern Ireland, first-time buyers benefit from generous Stamp Duty Land Tax (SDLT) relief. You pay 0% stamp duty on properties purchased for up to £425,000.
For properties priced between £425,001 and £625,000, you pay a discounted rate of 5% on the portion above £425,000. If the purchase price exceeds £625,000, you do not qualify for any first-time buyer relief and pay standard rates.
3. Agreement in Principle (AIP)
Before you start viewing properties, obtain an Agreement in Principle (AIP) from a lender. An AIP states how much the lender is prepared to lend you in theory, based on a basic check of your income and credit file.
Having an AIP shows estate agents and sellers that you are a serious buyer with the financial backing to proceed. Most sellers will not accept offers unless you can show a valid AIP.
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Go to calculator →Frequently asked questions
What is a Lifetime ISA (LISA)?
A Lifetime ISA is a tax-free savings account designed to help first-time buyers save for a home. You can save up to £4,000 per year, and the government adds a 25% bonus (up to £1,000 per year) on top. The funds must be used to purchase your first home priced under £450,000.
How much deposit do I need to buy a home in the UK?
You need a minimum of 5% deposit. However, a larger deposit (such as 10% or 20%) reduces your loan-to-value ratio, which helps you qualify for lower interest rates and cheaper monthly payments.
Educational content only—not mortgage, tax, or legal advice. Confirm any decision with a licensed professional in your jurisdiction.