First Time Buyer Guide 2026: Everything You Need

Buying your first home is one of the biggest financial decisions you will ever make. It is also one of the most confusing. Between deposits, mortgage types, stamp duty rules, and government schemes that keep changing, it can feel like the goalposts are always moving.

I remember the stress of trying to piece it all together for my first purchase. Nobody gives you a single, clear guide. So here it is. Everything you need to know as a first time buyer in 2026, in plain English.

How much deposit do you actually need?

The short answer: between 5% and 15% of the property price, depending on the mortgage deal you want.

A 5% deposit is the absolute minimum most lenders will accept. On the current UK average house price of around £290,000, that is £14,500. In London, where the average is closer to £525,000, you are looking at £26,250 just for a 5% deposit.

But here is the reality. The bigger your deposit, the better your mortgage rate. Lenders price their deals by loan-to-value (LTV) ratio. A 90% LTV mortgage (10% deposit) will typically have a lower interest rate than a 95% LTV deal (5% deposit). The sweet spots tend to be at 10%, 15%, and 25% deposit levels, where rates drop noticeably.

A 10% deposit on a £290,000 home is £29,000. That is a big number, and I am not going to pretend otherwise. But the difference in interest rate could save you thousands over the life of the mortgage.

Stamp duty relief for first time buyers

First time buyers get a significant stamp duty discount. In 2026, the relief works like this:

No stamp duty on the first £425,000 of the property price
5% stamp duty on the portion between £425,001 and £625,000
If the property costs more than £625,000, you lose the relief entirely and pay standard rates

For most first time buyers outside London, this means you will pay zero stamp duty. On a £290,000 property, you save thousands compared to what a non-first-time-buyer would pay.

This relief applies in England and Northern Ireland. Scotland and Wales have their own schemes (Land and Buildings Transaction Tax and Land Transaction Tax respectively), with their own first time buyer reliefs.

One important note: to qualify, you must never have owned a property anywhere in the world. If you inherited a share of a property, or owned one abroad, you may not qualify. Check with your solicitor.

Fixed vs variable mortgages: which should you choose?

When you get a mortgage, you need to choose between fixed rate and variable rate. Here is the difference.

Fixed rate means your monthly payment stays the same for a set period, usually 2 or 5 years. You know exactly what you will pay every month. No surprises. This is what most first time buyers choose, and for good reason. When you are stretching your budget to get on the ladder, predictability matters.

Variable rate means your payment can go up or down, usually tied to the Bank of England base rate or your lender’s standard variable rate (SVR). Variable rates are often cheaper initially, but they carry risk. If rates rise, your payments rise with them.

In 2026, with interest rates still elevated compared to the record lows of the 2010s, most people are choosing 2-year or 5-year fixed deals. A 5-year fix gives you longer certainty, while a 2-year fix lets you remortgage sooner if rates come down. There is no universally right answer. It depends on your appetite for risk and how long you plan to stay in the property.

Tracker mortgages are a type of variable rate that follow the Bank of England base rate plus a set margin. They are transparent but still carry the risk of rate rises.

How much can you borrow?

Most lenders will offer you 4 to 4.5 times your annual income. Some will stretch to 5 or even 5.5 times for certain borrowers, but do not bank on it.

If you earn £35,000, you can expect to borrow roughly £157,500 to £175,000. If you are buying with a partner who earns the same, that doubles to around £315,000 to £350,000.

But affordability is not just about your salary. Lenders stress-test your application against higher interest rates (usually 3% above the deal rate) and factor in your existing debts, spending habits, and financial commitments. Student loan repayments, car finance, credit card balances, even your childcare costs all come into play.

Before you start viewing properties, get a mortgage in principle (also called an agreement in principle). This is a quick check by a lender to confirm roughly how much they would lend you. It is not a guarantee, but it shows estate agents you are a serious buyer.

The Lifetime ISA: free money towards your first home

If you are under 40 and saving for a first home, the Lifetime ISA is one of the best tools available. You can save up to £4,000 per year and the government adds a 25% bonus on top, worth up to £1,000 a year in free money.

The property must cost £450,000 or less, and you must have held the LISA for at least 12 months before using it. So open one now, even if you are not close to buying. The clock starts ticking from the day you open it.

Be aware that withdrawing for anything other than a first home purchase (or retirement at 60) triggers a 25% penalty, which actually eats into your own contributions, not just the bonus. Only use a LISA if you are confident you will buy a qualifying property.

Important: the government has confirmed that LISAs will close to new applicants from April 2028. If you do not have one yet, the window is narrowing.

Help to Buy has closed

If you have seen articles about Help to Buy equity loans, ignore them. The scheme closed to new applications in 2022 and the final completions deadline has now passed. It is done.

There is no direct replacement. The government’s current approach leans on the Lifetime ISA and shared ownership (more on that below) rather than equity loan schemes. There have been murmurs about new schemes, but nothing concrete as of 2026.

Shared ownership: an alternative route

If you cannot afford to buy a property outright, shared ownership lets you buy a share (usually between 25% and 75%) and pay rent on the rest. Over time, you can “staircase” by buying additional shares until you own the whole property.

Shared ownership is available on new builds and some resale properties through housing associations. It has its own quirks:

You still need a deposit, but only on the share you are buying (e.g., 5% of a 25% share)
You pay rent on the portion you do not own, which can increase
Service charges on new builds can be significant
Selling a shared ownership property can be more complicated

It is not perfect, but for some people, especially in expensive areas, it is the only realistic way onto the ladder. Run the numbers carefully before committing.

How to save for a deposit

This is where most people get stuck. Here are strategies that actually work.

Set a specific target and timeline. “I want to save £20,000 in 3 years” is better than “I want to buy a house someday.” Break it down: £20,000 over 36 months is roughly £556 a month.

Automate your savings. Set up a standing order on payday. Money you never see in your current account is money you will not spend. Move it into a dedicated savings account or your LISA immediately.

Cut the big three. Housing, transport, and food are where most of your money goes. If you can reduce any of these, even temporarily, the impact is huge. Moving back home, cycling to work, or meal prepping can each free up hundreds a month.

Boost your income. A side hustle, overtime, or a better-paying job can accelerate your timeline dramatically. Even an extra £300 a month gets you to £20,000 about 10 months sooner.

Use high-interest savings accounts. With easy access rates around 4-5% in 2026, your deposit should be working for you while you save. Do not leave it sitting in a current account earning nothing.

How long does it realistically take?

Let us be honest. On a single average UK salary of around £35,000 (roughly £2,300 take-home), saving a 10% deposit of £29,000 while paying rent is hard. If you can put aside £500 a month, that is nearly 5 years. With interest, you might shave a few months off.

For couples pooling their savings, the timeline shortens. Two people saving £400 each per month reaches £29,000 in about 3 years.

If you are in London, the numbers are significantly tougher. A 10% deposit on a £525,000 property is £52,500. At £800 a month combined savings, that is over 5 years. This is why many first time buyers in London look at zone 3 and beyond, or consider commuter towns where prices are more manageable.

The application process step by step

Once you have your deposit saved and your mortgage in principle, here is how the buying process works.

Find a property and make an offer. Estate agents will want to see your mortgage in principle. Offers below asking price are common; do not be afraid to negotiate.
Get a mortgage offer. Once your offer is accepted, apply formally with your lender. They will verify your income, run credit checks, and value the property. This takes 2 to 6 weeks.
Instruct a solicitor. Your solicitor handles the legal work (conveyancing). They run searches, check the title, and manage the contract exchange. Budget £1,000 to £2,000 for legal fees.
Survey the property. Your lender does a basic valuation, but you should also get your own survey. A homebuyer’s report or full building survey can uncover problems before you commit.
Exchange contracts. This is the point of no return. You pay your deposit (usually 10% of the purchase price, which comes from your savings) and both parties are legally committed.
Complete. The remaining money transfers from your lender to the seller’s solicitor. You get the keys. The property is yours.

From offer accepted to completion typically takes 8 to 12 weeks, but it can take longer if there is a chain (multiple linked transactions). First time buyers have an advantage here because they are chain-free, which makes your offer more attractive to sellers.

Final thoughts

Buying your first home is stressful. The deposit feels impossible, the process feels endless, and the numbers can be terrifying. But millions of people do it every year, and with the right preparation, you can too.

Start with the basics. Know your budget. Get your mortgage in principle. Open a Lifetime ISA if you have not already. Save aggressively and be patient. The property market rewards preparation and persistence, not panic.

And remember, your first home does not have to be your forever home. Get on the ladder, build equity, and upgrade when you are ready. Done is better than perfect.

First Time Buyer Guide 2026: Everything You Need to Know