Around 390,000 first-time buyers completed a purchase in 2025 — an 18% increase on the previous year. That sounds like good news, and it is. But it also means hundreds of thousands of people are navigating this process for the first time, often relying on advice from friends, family, or internet forums that may be outdated or just plain wrong.
I’ve been writing about the UK property market for long enough to notice a pattern. The same myths come up again and again — about deposits, about how much you can borrow, about government schemes that people assume have disappeared. And those myths cost people time, money, and sometimes the chance to buy at all. First-time buyers now account for 54% of all mortgage-backed purchases, so getting this right matters more than ever. Here’s what you actually need to know.
If you’re wondering whether now is the right time to start looking, I’d suggest reading this piece on smart strategies for first-time buyers — it covers the timing question in more detail. And if you’re worried about the upfront costs, a property lawyer can help you understand the legal fees and stamp duty implications before you commit to anything.
What a first-time buyer mortgage actually is
Most people assume a first-time buyer mortgage is a special product with lower rates. It isn’t. It’s a standard residential mortgage, but lenders apply slightly different criteria because you don’t have a history of making mortgage payments. That means they look harder at your bank statements, your employment stability, and your existing debts. The key difference is that you can access government-backed schemes that aren’t available to existing homeowners.
The single most important thing to understand is the LTV ladder. Each 5% step up — from 95% to 90%, from 90% to 85% — typically unlocks a noticeably better interest rate. A 10% deposit is the first tier where lender competition really kicks in, and 15% or 25% deposits get you the best published rates. But that doesn’t mean you need to wait until you have a huge deposit saved. The Mortgage Guarantee Scheme, made permanent in July 2025, supports 95% LTV mortgages across most major lenders, and from May 2026, Lloyds offers a 98% LTV product with a flat £5,000 deposit regardless of the property price up to £500,000. That’s a genuine game-changer for people who thought they’d need years more saving.
What I’d tell anyone starting out: don’t fixate on the deposit figure alone. Focus on what you can borrow, because that’s where most people get stuck. If you’re buying with a partner, lenders assess your combined income, but they also stress-test affordability at a higher rate than your contract rate to make sure you could still pay if rates rise. Your existing financial commitments — credit cards, car finance, student loan repayments — all reduce your borrowing power. That’s why understanding your payment options before you apply is so important.
Why the deposit myth is costing you time
The most persistent myth I hear is that you need a 10% or 20% deposit. The reality is that the average first-time buyer puts down around 22% — about £53,000 in England — but that’s an average, not a requirement. The technical minimum is 5% of the property’s value, and as I mentioned, there are now products that go even lower. The problem is that many people assume they can’t afford to buy, so they don’t even start looking, and they miss out on schemes that could help them.
Consider this: a 22-year-old earning the median salary of £34,000 would need approximately 8 to 10 years to save a 10% deposit for the average UK property, assuming no parental help and a savings rate of 15% of gross income. That’s a long time to wait. But with a 5% deposit product and the Mortgage Guarantee Scheme, that same person could buy much sooner — provided their income and credit profile support the borrowing.
There’s also a regional divide that doesn’t get enough attention. In London, the average FTB deposit exceeds £120,000, and the average property costs £472,000 — 3.4 times the North East average of £139,000. London’s homeownership rate among under-35s has fallen below 30%, while rates in northern regions remain above 50%. If you’re in a more affordable area like Burnley, where the average FTB price is around £95,000, a 5% deposit is under £5,000. The geography of this market is wildly uneven, and the advice you get needs to reflect where you actually live.
What I’d do in your position: check what’s available in your region before you assume you can’t afford it. Use a whole-of-market broker who can tell you which lenders are active in your area and what deposit products they offer. And if you’re in a high-price area, look at schemes like First Homes in England, which offers a 30–50% discount on new-builds for local first-time buyers. That’s a discount on the purchase price, not just a lower deposit — it changes the maths completely.
Where first-time buyers go wrong
I’ve seen the same mistakes repeat across hundreds of applications. Here are the ones that cost people the most.
Ignoring your bank statements until it’s too late
Lenders look at three months of bank statements as standard. They’re checking for gambling transactions, unarranged overdrafts, regular payments to payday lenders, and any sign that you’re living beyond your means. The single biggest lever most first-time buyers don’t use is cleaning up their spending for three months before applying. That means cancelling unused subscriptions, avoiding large cash withdrawals, and making sure your rent and bills are paid on time. A financial advisor can help you structure your finances to meet lender criteria, but the basics are straightforward: spend less than you earn, and make it visible on paper.
Not understanding how student loans affect borrowing
Plan 2 student loan repayments are taken into account when lenders assess affordability. If you’re on a Plan 2 loan and earning above the threshold, your monthly repayment reduces how much you can borrow. Many graduates don’t realise this until their mortgage application is declined or they’re offered less than they expected. The fix is to check your student loan repayment amount before you apply and factor it into your budget. If you’re close to the borrowing limit, consider whether overpaying the loan early would improve your position — though that’s a calculation that depends on your interest rate and repayment timeline.
Applying to the wrong lender first
Every full mortgage application triggers a hard credit check. If you apply to three lenders and get declined by two, those rejections stay on your credit file and make it harder to get accepted by the third. A whole-of-market broker runs a soft search first, which doesn’t affect your credit score, and can tell you which lenders are most likely to accept your specific circumstances. Some lenders are more flexible with irregular income, self-employment, or unusual deposit sources. Others are stricter. Knowing which is which before you apply saves time and protects your credit file.
Overlooking the stamp duty threshold change
The first-time buyer stamp duty nil-rate threshold in England and Northern Ireland returned to £300,000 in April 2025, down from £425,000. That means if you’re buying a property for £350,000, you’ll pay 5% on the £50,000 above the threshold — £2,500 in stamp duty. Many buyers who started saving under the old threshold haven’t adjusted their budget. If you’re looking at properties between £300,000 and £425,000, factor in that extra cost. Above £500,000, no FTB relief applies at all, and standard SDLT rates kick in.
→ Scroll right to see all columns
| Property price | FTB stamp duty (England/NI) | Standard stamp duty |
|---|---|---|
| £250,000 | £0 | £2,500 |
| £350,000 | £2,500 | £7,500 |
| £450,000 | £7,500 | £12,500 |
| £550,000 | £17,500 | £17,500 |
What I’d do: get an Agreement in Principle before you start viewing properties. It’s a soft credit check that gives you an indicative borrowing figure, and it shows estate agents you’re serious. Then use a broker to run a full comparison before you make a formal application. The tips for buying with transport access might also help you narrow down locations that fit your budget and commute needs.
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How to actually get a mortgage as a first-time buyer
Here’s the process that works, based on what I’ve seen succeed across hundreds of applications. Follow these steps in order, and you’ll avoid most of the common pitfalls.
Get your finances in order before you look at properties
Three months of clean bank statements is the single most important preparation step. That means no gambling transactions, no unarranged overdrafts, no late payments on credit cards or loans. If you have any outstanding debts, pay them down or clear them before you apply. Lenders also look at your credit utilisation — using more than 50% of your available credit limit is a red flag. Check your credit report with all three agencies (Experian, Equifax, TransUnion) and correct any errors before you apply. A real estate lawyer can review any property-related legal issues that might affect your application, but the financial preparation is entirely in your hands.
Get an Agreement in Principle from the right lender
An AIP is a soft credit check that gives you an indicative borrowing figure. It’s not a guarantee, but it tells estate agents you’re a serious buyer and helps you set a realistic budget. The key is to get the AIP from a lender that’s likely to approve your full application. A whole-of-market broker can run a soft search across multiple lenders to find the best match for your circumstances. Some lenders are more flexible with self-employed income, bonus income, or irregular work patterns. Others are stricter. Knowing which is which before you get the AIP saves time and avoids unnecessary credit checks.
Make a full application with the right documentation
Once you’ve found a property and had an offer accepted, you’ll make a full mortgage application. This triggers a hard credit check and requires documentary evidence: proof of income (payslips, tax returns if self-employed), bank statements, proof of deposit source, and ID. The underwriting process takes 2 to 6 weeks. During this time, don’t make any major financial changes — don’t switch jobs, don’t take out new credit, don’t make large purchases. Lenders can and do check your finances right up to completion.
Choose the right survey and conveyancer
The lender always carries out a valuation, but that’s for their benefit, not yours. For an older property, commission a HomeBuyer or Building Survey separately — costs range from £300 to £1,000 depending on the level. Your conveyancer handles searches, contracts, the deposit transfer, and stamp duty submission. Conveyancing fees typically run £1,200 to £2,500. Don’t choose the cheapest conveyancer without checking reviews — errors in this stage can delay completion or cost you money. A property lawyer can handle the legal side and flag any issues with the title or planning permissions.
- 1Clean up your financesThree months of clean bank statements, no gambling, no late payments, pay down debts.
- 2Get an AIP via a brokerSoft credit check, indicative borrowing figure, no impact on credit score.
- 3Full application with documentsHard credit check, payslips, bank statements, proof of deposit. 2–6 weeks underwriting.
- 4Survey and conveyancingSeparate survey for older properties, conveyancer handles legal work and stamp duty.
- 5Exchange and completeExchange commits both parties, completion is key handover. Typically 6–12 weeks from offer.
If you’re looking at new-build properties, the guide to buying land with planning permissions covers the additional checks you’ll need. And if you’re considering shared ownership, remember that you only need a 5% deposit on your share, not the full property price — that can make a significant difference in high-price areas.
Frequently asked questions
Can I use a Lifetime ISA for a property over £450,000? ▾
What counts as a first-time buyer for stamp duty purposes? ▾
Can I get a mortgage if I’m self-employed? ▾
What happens if my mortgage application is declined? ▾
Do I need a solicitor or can I do conveyancing myself? ▾
Can I buy with a friend who isn’t a first-time buyer? ▾
The most important thing I can tell you is this: don’t let the myths stop you from starting. The market has changed significantly in the last few years, and many of the old rules no longer apply. The Mortgage Guarantee Scheme is permanent. The Lloyds 98% LTV product exists. Shared Ownership and First Homes are still available. The average first-time buyer is now 34 years old, and over 50% of FTB households rely on dual incomes — you’re not alone in finding this challenging.
If this was useful, you might also want to read Understanding seller financing options for home buyers.
Sources and Further Reading
Understanding vacancy rates when buying in the UK — A practical look at how local vacancy data affects property values and rental demand.
First-time buyer mortgage guide. Mortgage Connector, 2026.
First-time buyer statistics UK 2026. Shaded Canvas, 2026.
