Buying Your First Home in the UK
Getting on the property ladder in the UK feels harder than ever, with average house prices around £285,000 and even higher in London and the South East. But with the right preparation, government schemes, and a solid savings plan, first-time buyers have more support than ever. This guide walks you through every step.
Step 1: Build Your Deposit
- How much do you need? — Minimum 5% deposit (£14,250 on a £285,000 home). But 10-15% gets you much better mortgage rates. 15% deposit = £42,750. Every 5% extra deposit typically reduces your rate by 0.2-0.5%
- Lifetime ISA — Save up to £4,000/year and get a 25% government bonus (£1,000/year free). Available for ages 18-39. Must be open for 12 months before using for a home purchase. Maximum property price: £450,000. Over 4 years, you could have £20,000 saved + £5,000 in bonuses = £25,000
- Regular savings — Set up a standing order on payday. Even £500/month for 3 years gives you £18,000 + interest. Cut expenses ruthlessly: cancel unused subscriptions, reduce takeaways, consider a cheaper phone contract
- Help from family — Gifted deposits are accepted by most lenders. The giftor must sign a letter confirming it is a gift, not a loan. Some lenders offer guarantor mortgages where parents use their savings or property as security
Step 2: Check Your Mortgage Readiness
- Credit score — Check your score with Experian, Equifax, and TransUnion (all free via ClearScore, Credit Karma, or MSE Credit Club). Register on the electoral roll (boosts your score). Pay off any defaults or CCJs if possible
- Affordability — Lenders typically offer 4-4.5x your annual income. Earning £40,000 = mortgage of £160,000-£180,000. Joint income of £70,000 = £280,000-£315,000. Some lenders offer up to 5-5.5x for professionals (doctors, lawyers, accountants)
- Spending habits — Lenders review 3-6 months of bank statements. Reduce discretionary spending, cancel gambling apps, and avoid payday loans in the months before applying
- Agreement in Principle (AIP) — Get this before house hunting. A soft credit check that tells you how much a lender would likely offer. Valid for 60-90 days. Shows estate agents and sellers you are serious
Step 3: Find and Buy Your Home
- Search — Use Rightmove, Zoopla, and OnTheMarket. Set up alerts for your criteria. View at least 10-15 properties before making offers
- Make an offer — In England and Wales, offers are not legally binding until contracts are exchanged. Offers 5-10% below asking price are common. Your AIP strengthens your position
- Conveyancing solicitor — Appoint a solicitor or licensed conveyancer to handle the legal work. Costs £1,000-£2,000. They conduct searches, review contracts, and manage the exchange
- Survey — Get a homebuyer survey (£400-£600) or full building survey (£600-£1,500) for older properties. Mortgage valuation alone is not enough — it only checks the property is worth the price, not its condition
- Exchange and completion — Exchange of contracts makes it legally binding (you pay your deposit at this stage). Completion happens 1-4 weeks later — you get the keys and move in
Costs Beyond the Deposit
- Stamp Duty — First-time buyers pay nothing on properties up to £425,000. 5% on amount above £425,000 up to £625,000
- Solicitor fees — £1,000-£2,000 including searches and Land Registry fees
- Survey — £400-£1,500 depending on type and property
- Mortgage fees — Arrangement fee £500-£2,000 (can often be added to the loan). Valuation fee £0-£500 (many lenders offer free valuations)
- Moving costs — Removal van, new furniture, redirecting post: budget £1,000-£5,000
- Emergency fund — Keep at least £3,000-£5,000 after all purchase costs for unexpected repairs
Total budget needed: For a £300,000 property with 10% deposit: £30,000 deposit + £3,000-£5,000 fees + £3,000 emergency fund = approximately £36,000-£38,000 minimum.