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Buyer Basics:
The First-Time Buyer Guide
Welcome to the guide for first-time home buyers in the UK. Buying your first home is exciting although it can be a bit overwhelming, but don't worry! Here we break down the essentials, from scraping together a deposit to getting the keys on completion day. Let's jump in!
Deposits: Building Your Home-Buying Nest Egg
What's a Deposit?
In home-buying, the deposit is the cash you put down upfront towards the property price. It's usually paid from your savings when you exchange contracts. For first-time buyers, this mostly comes from personal savings (your rainy-day house fund). The mortgage you take out will cover the rest of the purchase price.
How Much Do You Need?
Most lenders require at least 5%–10% of the property price as a minimum deposit. For example, if you're eyeing a £200,000 home, you'll typically need at least £10,000–£20,000 upfront. A larger deposit is always helpful: it means you'll borrow less, your monthly payments will be lower, and you'll often snag a better interest rate on your mortgage. In fact, putting down 10% or more (if you can manage it) opens the door to a wider range of mortgage deals and could save you money in the long run. Don't be discouraged if 10% feels huge, there are ways to reach your goal, even if it takes some time.
Personal Savings
Regular deposits into a savings account, cutting back on extras, and maybe hustling for that promotion or side gig.
Gifted Deposits
Many first-timers get help from the "Bank of Mum and Dad" – a gifted deposit from family. You'll typically need a signed gift letter stating the money is a gift, not a loan.
Lifetime ISA (LISA)
With a LISA, you can save up to £4,000 a year and the government adds a 25% bonus on top, that's up to £1,000 free each year if you max it out.
Mortgages: Home Loans Made Simple
What's a Mortgage?
A mortgage is basically a loan to buy a home, since most of us aren't swimming in cash to buy a house outright. You borrow the rest of the purchase money from a lender (like a bank or building society) and repay it monthly, with interest. The key thing is that the loan is secured against the property, meaning the house is collateral.
If you don't pay, the lender can ultimately repossess the home (though that's a last resort scenario). But don't let that scare you; millions of people successfully pay their mortgages every month. It's a normal part of buying a home.
How Much Can You Borrow?
This depends on your financial situation. Lenders will look at your income, debts, and regular expenses to decide what you can afford, this is called an affordability assessment. As a rule of thumb, many lenders cap the mortgage amount to roughly 4 to 4.5 times your annual salary. So if you earn £30,000 a year, you might be able to borrow around £120,000–£135,000 (assuming your finances are otherwise in good shape).
Some may offer more (5× your salary or even higher in special cases), while others might offer less if you have existing loans or big expenses. Remember, just because a bank is willing to lend you the maximum doesn't mean you should borrow the maximum, you'll want to leave yourself some breathing room for living costs and surprises.
Types of Mortgages
Fixed-Rate Mortgage
Your interest rate (and monthly payment) is locked in for an initial period, typically 2, 3, 5, or even 10 years. The benefit is certainty: you know exactly what you'll pay every month, which can help you budget.
Variable-Rate Mortgage
The interest rate can change over time. This includes tracker mortgages, which follow the Bank of England's base rate. If the base rate goes down, your rate goes down (cheaper payments!), but if it goes up, so do your costs.
Standard Variable Rate (SVR)
The default rate you go to after a fixed deal ends, which can move up or down at the lender's discretion.
Mortgage in Principle (AIP/DIP)
An Agreement in Principle (AIP) is a written estimate from a lender saying how much they'd be willing to lend you based on a quick look at your finances. It's not a full approval, but rather a free, no-obligation certificate (usually valid for 30–90 days) that gives you a realistic budget.
Getting an AIP is a smart move before house-hunting: it lets you (and estate agents) know your price range and shows sellers you're a serious buyer.
Top Tip:
Check your credit score and tidy up your finances before applying for a mortgage. Lenders will peek into your financial history. Paying down credit cards, avoiding new loans, and making sure you're on the electoral roll can all help your mortgage chances. A little prep work can score you a better deal!
Solicitors & Conveyancers: Your Legal Sidekicks
Role in the Home-Buying Process
Once your offer is accepted, you'll need a solicitor or licensed conveyancer to handle all the legal bits of buying a home. This is called conveyancing, essentially, transferring ownership of the property from the seller to you. Your solicitor/conveyancer will:
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handle the contracts (the written agreements for the sale)
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perform searches (enquiries with local authorities to check things like any planning issues, drains, or surprise road schemes that might affect the property)
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give legal advice and explain any jargon
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liaise with the Land Registry (to officially record you as the new owner)
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handle the transfer of funds (they'll send your payment to the seller's solicitor on completion day)
In short, they make sure the property is legally sound for you to buy and that the whole transaction completes properly. The first question an estate agent will ask after your offer is accepted is, "What solicitor will you be using?", so it's a good idea to have one lined up early!
Solicitor or Conveyancer?
In the UK you can use either. A licensed conveyancer is a specialist in property law, typically a bit cheaper, but they only do conveyancing (they're pros at it, though). A solicitor is a fully qualified lawyer who can handle more complex legal issues if they arise (and thus may charge more). For a straightforward first-home purchase, a conveyancer is often perfectly fine – just ensure they're properly licensed. Both are regulated professionals, so either way you'll be in safe hands.
How to Choose One
Don't just go with the first name thrown at you. It pays to shop around and get quotes from a few firms, prices can vary quite a bit. Ask friends or family if they recommend someone, and check online reviews. A good solicitor can prove invaluable so it's important to research and compare.
Costs to Expect
Legal fees for buying a house can range roughly from around £800 up to £1,500 (or more), depending on the property price, region, and complexity. MoneyHelper notes an average of about £2,000 (inc. VAT) for standard legal fees on a purchase. On top of the basic fee, you'll pay for disbursements, these are third-party costs your solicitor handles for you, such as local search fees (~£250–£300), Land Registry fees, and bank transfer fees.
Smart Move:
Pick a solicitor/conveyancer with an online tracking portal or who gives regular updates. Buying your first home comes with lots of anxious waiting. A firm that lets you check progress (or sends weekly updates) can save you a lot of stress. It's reassuring to know what's happening behind the scenes!