The Complete Guide for First-Time Buyers

The average first-time buyer in the UK is now 34, according to the English Housing Survey, up from 32 five years ago. Rising prices explain most of that shift. They don't explain all of it. The buyers who move fastest aren't the ones with the biggest income. They're the ones with a plan for the one barrier that actually stops most people: the deposit.

The deposit: how much you need, and how to close the gap

The average first-time buyer property in the UK now costs around £226,000. A 10% deposit on that is £22,600. Under the government's Mortgage Guarantee Scheme, now a permanent fixture rather than a temporary offer, some lenders will accept 5%, bringing that figure closer to £11,300 on a property up to £600,000.

Research your local market before you set a target. Prices vary sharply by region, and the number you're saving toward should reflect where you're actually buying, not the national average.

Six ways to close the gap faster:

Review what you're actually spending. Most people can find some room to save more without a dramatic lifestyle change. Even a modest, regular amount compounds over time.

Break the target into stages. £22,600 is abstract. A monthly figure isn't. Set a realistic monthly target and track it, rather than measuring yourself only against the final number.

Pay yourself first. Move your savings out the moment you're paid, before the rest of the month gets a chance to claim it.

Use a Lifetime ISA if you're certain about buying. You can pay in up to £4,000 a year and the government adds 25%, up to £1,000 a year, toward a property worth £450,000 or less. You need to be between 18 and 39 to open one, though you can keep contributing until 50. Withdraw for anything other than a first home before age 60 and you lose the 25% bonus on what you take out.

The LISA is being phased out. From April 2028, it's replaced by a new First-Time Buyer ISA, confirmed in a government consultation launched in June 2026, and you won't be able to open a LISA once the replacement is live. If you open one now, or already hold one, you keep the current rules and can carry on contributing indefinitely, nothing forces you to move across. The new account drops the retirement-savings option, removes the 25% withdrawal penalty, and pays its bonus as a lump sum on completion rather than monthly. If a deposit is still some way off, opening a LISA now rather than waiting is worth considering, since it locks in access to the current terms before the window closes..

If you already hold a Help to Buy ISA, keep using it. You can't open a new one, but existing accounts can still receive contributions until November 2029, with the same 25% bonus up to £3,000.

Ask whether family support changes the maths. According to Savills research published in June 2026, 53% of first-time buyers now receive financial support from family, through gifts, loans or inheritance, totalling £8.3 billion in 2025. If that's part of your plan, get the basics agreed in writing before the money moves. We cover this properly in our Bank of Mum and Dad guide.

What government schemes can do for you

The Mortgage Guarantee Scheme (now branded Freedom to Buy) was made permanent in July 2025. It works behind the scenes: the government guarantees part of the lender's risk on a 95% mortgage, so more lenders offer them, on properties up to £600,000. You still pass the same affordability checks as any other applicant.

Help to Buy Equity Loans have closed to new applicants in England. A version continues in Wales, reducing the deposit and mortgage size needed on a new-build home. If you're buying in Wales, ask us whether it applies to you.

How much you can borrow

Lenders typically work to a rule of thumb of around 4.5 times your annual income, though your actual figure depends on your outgoings, existing debt, and credit history as well as your salary.

A mortgage in principle gives you a working number before you start viewing. Most applications complete online in minutes, use a soft credit check that won't affect your score, and stay valid for around three months. Many estate agents expect to see one before they'll pass on an offer.

It's an indication, not a guarantee, and you're not tied to the lender who issued it. Run your own numbers alongside the lender's before you commit to a search range: a lender confirming what you can borrow isn't the same as confirming what you can comfortably afford.

Choosing the right mortgage

Two decisions sit inside every mortgage: how the debt is structured, and how the interest is calculated.

Structure. A repayment mortgage clears both interest and capital each month, so you own the home outright at the end of the term. An interest-only mortgage keeps monthly payments lower, but the full amount borrowed is still owed at the end, which is why it's become far less common among first-time buyers.

Interest. A fixed rate holds your payment steady for two, three or five years, useful for budgeting, at the cost of missing out if rates fall. A tracker rate follows the Bank of England base rate directly, rising and falling with it. A variable rate follows your lender's own rate rather than the Bank's, which means it can move independently of the base rate.

Whichever you choose, that deal won't last the full mortgage term. When it ends, you're moved onto your lender's standard variable rate unless you act. As of 10 August 2026, the average SVR sat at 7.13%, against an average two-year fixed rate of 5.63%, according to Moneyfacts. Knowing your deal's end date in advance is what lets you avoid that gap. Our Remortgaging guide covers this in full when the time comes.

Your term matters as much as your rate. On a £200,000 repayment mortgage at the current average two-year fixed rate of 5.63%, the difference between a 25 and 35-year term looks like this:

Calculated on a £200,000 repayment mortgage using Moneyfacts' average two-year fixed rate as of 10 August 2026, for illustration only.

A longer term buys lower monthly payments. It costs more overall. Beyond rate and term, check what fees the deal carries, whether you can overpay without penalty, and whether you can port the mortgage to a future property.

Improving your chances of approval

Lenders are assessing risk, not just income. Seven things move the odds in your favour:

• Be realistic about what you can afford, not just what a lender might offer.
• Show a reliable income, with payslips ready if you're employed and up-to-date accounts if you're self-employed.
• Check your credit report before you apply. Registering on the electoral roll and correcting errors can lift your score.
• Reduce unsecured debt where you can. A lower debt-to-income ratio gives lenders more confidence.
• Hold off on new credit applications in the run-up to your mortgage application. Each one shows as a hard search a lender can see.
• Expect your bank statements to be reviewed. Regular overdraft use, gambling transactions, or payday loans are the kind of pattern that concerns underwriters, not the odd takeaway.
• If one lender declines you, others may still say yes, and a broker can point you toward the ones most likely to.

Taking out a mortgage is also a reasonable moment to think about what happens if you couldn't keep up repayments through illness or injury. Financial protection isn't compulsory, but it's worth a conversation while you're already reviewing your finances. Talk to us if you want to know what your options are.

From offer to keys

Once you find the right property, the process runs through a fairly fixed sequence:

Offer accepted. The property comes off the market, usually marked "sold subject to contract."

Secure your mortgage. Don't default to your existing bank or the lender behind your agreement in principle. A broker can compare the wider market for you, and some deals carry an upfront fee worth checking before you commit.

Instruct a conveyancer. They handle the contract, legal paperwork, and exchange of funds. Get quotes and understand the full cost before you sign anything, since fees vary by firm, location and property.

Consider a survey. Your lender checks the property is worth what you offered. A separate survey checks its condition, and can give you grounds to renegotiate if it turns up problems, from cosmetic to structural.

Searches. Your solicitor runs these on your behalf. Some are optional, some are a condition of your mortgage, and they can surface issues like planning history or land contamination.

Set a completion date. Once your mortgage is approved, this is the date you get the keys. Build in flexibility, especially if anyone in the chain is waiting on their own sale.

Watch for gazumping and gazanging. The names sound invented for a children's book. The risks are real. Gazumping is when another buyer outbids you and your seller walks. Gazanging is when your seller simply changes their mind and stays put leaving you ‘hanging’. Neither is fully avoidable, but moving quickly through each stage reduces your exposure to both.

Send your deposit and exchange contracts. This is the point the sale becomes legally binding for both sides. Large sums moving between accounts also make this the point fraudsters target: always verify bank details independently, and treat any last-minute change to payment instructions as a reason to call your solicitor directly before sending anything.

Completion. Your solicitor draws the funds from your lender, registers your ownership with the Land Registry, and files your Stamp Duty return. You collect your keys.

What you'll pay in Stamp Duty

Most first-time buyers pay less than they expect, though the rules differ by nation.

In England and Northern Ireland, since the reforms of April 2025, first-time buyers pay nothing on the first £300,000 of a property's price. Between £300,001 and £500,000, you pay 5% on the amount above £300,000. Above £500,000, the relief disappears entirely and standard rates apply to the full price.

In Scotland, first-time buyer relief raises the nil-rate threshold from the standard £145,000 to £175,000 under the Land and Buildings Transaction Tax, worth up to £600.

In Wales, there's no dedicated first-time buyer relief under Land Transaction Tax. The standard nil-rate threshold sits at £225,000 for everyone, which covers most first-time purchases in the country regardless.

A return is required within 14 days of completion in every case, even where no tax is due. Your solicitor handles the filing.

What a plan gets you

Get this right and buying your first home stops being something that happens to your finances and becomes something you direct. You know what you're saving toward and why. You know which scheme, if any, actually applies to you. You know your mortgage costs before you commit to them, and what happens the day your rate changes.

If you're thinking about buying your first home, talk to us. We'll help you work out what you can afford, which schemes fit your circumstances, and how to get from where you are now to picking up the keys.

Important information

This guide is provided by Pembroke Financial Planning Limited for general information only and does not constitute advice. The information is aimed at retail clients only, and reflects our understanding of the mortgage and lending market as at August 2026. Rates, thresholds, and scheme rules change, so figures should be checked before you rely on them. Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.

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Sources

English Housing Survey 2023–24 (gov.uk), average first-time buyer age.

Barclays Property Insights, May 2026, and Rightmove market data, average first-time buyer property price.

HM Treasury / Tembo, Mortgage Guarantee Scheme ("Freedom to Buy"), permanent from July 2025.

Savills (with Insight Advantage), "First-time buyers receive £11.0 billion in financial support from families," June 2026.

Moneyfacts, average mortgage rates, 10 August 2026.

HMRC, Stamp Duty Land Tax first-time buyer relief, effective April 2025.

Revenue Scotland, Land and Buildings Transaction Tax first-time buyer relief.

Welsh Revenue Authority, Land Transaction Tax nil-rate threshold.

Which?, credit report accuracy survey of 4,193 UK adults, July 2024.

Repayment and interest figures calculated on a £200,000 repayment mortgage over 25, 30 and 35-year terms at the Moneyfacts rate above, for illustration only.