Buying your first home is one of the biggest financial decisions you will make. This guide walks you through the entire process — from saving a deposit to collecting your keys.
1. Save Your Deposit
Most first-time buyer mortgages require a 5-10% deposit. A 10-15% deposit will unlock better interest rates. For a £250,000 property, you need £12,500 at 5% or £25,000 at 10%.
Lifetime ISA (LISA): If you are aged 18-39, you can save up to £4,000 per year and receive a 25% government bonus (up to £1,000/year). The property must cost £450,000 or less. The LISA is one of the most effective tools for first-time buyers.
2. Get a Mortgage Agreement in Principle
An AIP (also called Decision in Principle) confirms how much a lender is prepared to offer you. It involves a soft credit check and is usually valid for 60-90 days. Having an AIP makes your offer stronger and shows sellers you are serious.
Most lenders will lend 4-4.5x your annual gross income. Use our affordability calculator to estimate your borrowing capacity, and our mortgage calculator to model your monthly repayments.
3. Find Your Property
Search on Rightmove, Zoopla, and OnTheMarket. Register with local estate agents so they call you before listings go online — this matters in fast-moving markets. Write down what matters (bedrooms, commute time, school catchment, parking, garden) before viewing so emotion doesn't cloud your judgement.
When viewing, check: boiler age, EPC rating (anything below D will cost you to upgrade), mobile signal, signs of damp or recent plastering to hide it, and street parking at different times of day. Never view just once before offering.
4. Make an Offer
Make your offer through the estate agent verbally and follow up in writing. Mention you are chain-free (as a first-time buyer you are) and confirm you have an AIP — this makes you a credible buyer.
Your opening offer can be below the asking price, especially if the property has been on the market for a while. Check Rightmove/Zoopla for what similar properties have actually sold for, not just listed at. Negotiation is normal.
5. Instruct a Solicitor and Arrange a Survey
Once an offer is accepted, instruct a solicitor (or conveyancer) immediately. They handle searches, review the seller's title, raise enquiries, and manage exchange and completion. Budget £800–1,500.
Also arrange a survey. Three options:
- Valuation only: Required by your lender — does NOT reveal defects. Don't rely on this alone.
- Homebuyer Report (RICS Level 2): Highlights visible defects. Suitable for most standard properties. Cost: £400–750.
- Building Survey (RICS Level 3): Full structural inspection. Best for older, unusual, or extended properties. Cost: £600–1,500.
A survey can reveal issues that allow you to renegotiate the price before you're committed. It is almost always worth the money.
6. Exchange and Complete
Exchange is the legally binding moment. You pay your deposit (typically 10%) to your solicitor, who transfers it to the seller. Neither party can pull out after this point without significant penalty.
Completion happens 1–4 weeks after exchange. Your mortgage funds are drawn down, the balance transferred, and you collect the keys. Stamp duty must be paid within 14 days of completion — your solicitor handles this.
7. Budget for Additional Costs
The deposit is not the only cost. For a £250,000 property with a 10% deposit, budget roughly £27,500–31,000 total:
| Cost | Typical Range |
|---|---|
| Deposit (10%) | £25,000 |
| Solicitor/conveyancer | £800–1,500 |
| Survey (Homebuyer/Building) | £400–1,500 |
| Mortgage arrangement fee | £0–2,000 |
| Stamp duty (first-time buyer, under £300k) | £0 |
| Buildings insurance (from exchange) | £150–400/yr |
| Removals | £300–1,500 |
Useful Tools for First-Time Buyers
Related Articles
Frequently Asked Questions
How much deposit do first-time buyers need in the UK?
Most lenders require a minimum 5% deposit, though 10% unlocks significantly better mortgage rates. On a £250,000 property, a 5% deposit is £12,500 and a 10% deposit is £25,000. First-time buyers saving into a Lifetime ISA (LISA) can receive a 25% government bonus of up to £1,000 per year, making it one of the most effective savings vehicles available.
Do first-time buyers pay stamp duty in the UK?
First-time buyers in England pay no stamp duty on the first £300,000 of the purchase price and 5% on the portion from £300,001 to £500,000. If the property costs more than £500,000, the first-time buyer relief does not apply and standard rates are charged on the full amount. These thresholds apply from 1 April 2025.
What is a mortgage Agreement in Principle (AIP) and do I need one?
An Agreement in Principle (also called a Decision in Principle) is a written statement from a lender confirming how much they would be willing to lend you, subject to a full application and valuation. It involves a soft credit check and does not affect your credit score. Estate agents and sellers take offers more seriously from buyers who have an AIP, as it demonstrates you are financially prepared.
What additional costs should first-time buyers budget for beyond the deposit?
Beyond the deposit, first-time buyers should budget for a solicitor or conveyancer (£800–1,500), a survey (£400–1,500 depending on type), mortgage arrangement fees (£0–2,000), buildings insurance from exchange, and removal costs. On a £250,000 property with a 10% deposit, total costs including the deposit are typically £27,500–31,000.
What is the difference between exchange and completion when buying a home?
Exchange of contracts is the legally binding point at which both buyer and seller commit to the transaction. You pay your deposit (typically 10%) to your solicitor and neither party can pull out without significant financial penalty. Completion usually happens 1–4 weeks later, when your mortgage funds are drawn down, the balance is transferred, and you collect the keys.
Disclaimer: PropertyVault UK is not authorised or regulated by the Financial Conduct Authority (FCA). The content on this page does not constitute financial advice, investment advice, or mortgage advice. Always consult an FCA-regulated independent financial advisor or mortgage broker before making financial decisions. Your property may be repossessed if you do not keep up repayments on a mortgage.
Read our full Disclaimer, Terms of Use, and Privacy Policy.