What you need to know when you're a first-time buyer

What you need to know when you're a first-time buyer

By Matilda Battersby

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Buying your first home is very exciting and a little bit scary. We're here to help you every step of the way.

Buying a home is complicated. And it may seem especially daunting if you’ve never bought one before.

Let's go through all the steps you'll need to take to own your own place.

1. Saving for a deposit

The first thing to work out is how much cash you can put towards a deposit for your first home.

Whether it comes from savings you’ve been squirrelling away, or through family help, mortgage lenders like bigger deposits.

And they offer lower mortgage rates to those who have them, meaning the monthly repayments will be lower.

You’ll usually need a minimum deposit of 10% of the home you want to buy. That said, there are now quite a few mortgages available that only require a 5% deposit.

Compare the best 95% mortgage deals

If you’ve got more in the bank, then a 25% deposit (or more) will give you access to the best mortgage deals.

Compare the best 75% mortgage deals

It’s worth starting to save as soon as you can. There are some great schemes out there to help, like the LISA, where the government chips in £1,000 a year if you can save £4,000.

What is a Lifetime ISA?

How to save for a deposit

2. What to do if you haven’t got a deposit

Help is at hand. A range of government-backed options, specially designed to help first-time buyers step onto the ladder, are out there.

  • The Help to Buy: Equity Loan offers aspiring homeowners the chance to buy a new-build home with just a 5% deposit
  • Deposit Unlock is a new scheme launched by the house-building industry to enable you to buy a new-build home with just a 5% deposit
  • Shared Ownership allows buyers to purchase a share of a property and pay rent on the remaining share
  • First Homes helps local first-time buyers and key workers by offering new-build homes at a 30% - 50% discount
  • A Lifetime ISA allows first-time buyers to save up to £4,000 a year, with the government adding a 25% bonus
  • The 95% mortgage guarantee scheme means the government ‘guarantees’ mortgages for buyers with 5% deposits.
Image shows an adult talking on the phone while looking at a computer.

3. Get a mortgage

Unless you’re swimming in cash, you’re going to need a mortgage to buy your first home.

From repayment mortgages to interest-only mortgages, there are lots of different types available - and you'll need to work out which one works best for you.

What types of mortgages are there?

How much can I borrow?

4. Account for extra buying costs 

Solicitor’s fees, mortgage fees, stamp duty and other costs can add up when buying a home.

Here's a snapshot of the typical costs incurred when buying a home:

Type of cost Estimated cost
Conveyancer/ solicitor’s fees£2,000
Mortgage arrangement fees £1,000 to £2,000+
Mortgage booking fee £100 to £200
Valuation fee £150 to £800
Property survey£400 to £1,500
Removals£150 to £2,000+
Stamp duty0% to 12% of home value

Stamp duty

Your biggest extra cost is likely to be stamp duty. Stamp duty is a tax paid when you buy property or land over a certain value in England, Wales and Northern Ireland. 

How much you pay depends on the value of your property. The more expensive it is, the higher the amount of tax you’ll pay. 

Normal stamp duty rates

Property priceStamp duty percentage to pay
£0 - £125,000 0%
£125,000 - £250,0002%
£250,000 - £925,0005%
£925,000 - £1.5m10%
£1.5m+ 12%

Crucially, first-time buyers benefit from a stamp duty exemption rule.

If you’ve never owned a home or other property before, you’ll pay no stamp duty on the first £300,000 of a home worth up to £500,000. 

Between £300,001 and £500,000, a tax rate of 5% will apply. But it will only apply to that slice of the price, rather than the full amount.

First-time buyer stamp duty rates

Property pricePercentage of stamp duty paid
£0 - £300,000 0%
£300,000 - £500,000 5%
£500,000+Normal stamp duty rates apply

Find out more about the first-time buyers' stamp duty break

Find out more about stamp duty if you're not a first-time buyer

Mortgage costs

You might be getting a big sum loaned to you to buy a home, but you’ll need to factor in the cost of securing a mortgage. This is known as a mortgage arrangement fee. 

A mortgage arrangement fee is usually £1,000 to £2,000, but will vary depending on the mortgage deal on offer.

Your bank or building society might also ask you to cover the cost of assessing the value of the home you’re buying. This is known as a valuation fee. 

Survey costs

It’s not a legal requirement to have a survey on a property you're buying, but it could end up saving you thousands of pounds in the long run.

There are three types of survey available: a condition report (basic), a homebuyer report (suitable for buildings under 50 years old) and a building survey (very thorough).

A survey will cost you between £400 and £1,500 depending on how much detail you want.

What type of survey do I need?

Solicitors’ costs

When buying home, you’ll need a property solicitor. They might also be known as a conveyancer.

A property solicitor’s job is to help you manage the legal side of your home purchase. It will usually cost you around £1,200 to £2,000 for all the legal work.

It may be tempting to do it yourself, but trust us, it’s worth paying for a professional’s help.

They'll draw up the contract, deal with the Land Registry and manage the stamp duty charges. The Land Registry fees will vary depending on how much your property is worth.

Find out more about what a solicitor does to help you buy a home

A couple sitting on boxes in a white lounge having just moved in

5. How to find your first home

Ready to find a home? Search over 430,000 properties for sale on Zoopla, from new homes to period homes to shared ownership, we've got it all.

Look for homes with garages, offices or lovely big gardens with our advanced search tool.

Looking for a home in a certain area? Draw a map of your favourite streets and we'll only send you hot properties from these.

Fancy a pad that's near your favourite gastro pub? Our travel time tool will help you find it.

Be the first to know about new properties matching your requirements by signing up for a Zoopla property alerts here.

Eight tools to help you find your new home.

6. Making an offer

Once you’ve found your dream home, you’ll need to put in an offer.

You do this by telling the estate agent managing the home what you can pay for it, and detailing the position you’re in. The agent will then pass your offer on to the homeowner.

Your offer can be made in person, over the phone or via email.

You may need to provide proof that, as a first-time home buyer, you can secure a mortgage. This might be an Agreement in Principle from the bank that's offering you a home loan.

As a first-time home buyer, you're in a strong position to negotiate because you're not part of a chain. And sellers like this.

Here's how to decide what offer to make on a property.

7. From acceptance to completion

You’re on the final stretch of the home buying journey. The rest of the legwork is largely managed by solicitors.

As with any home sale, there are things that take time and that may go wrong. Either you or the person selling to you could pull out of the sale before contracts are exchanged.

But there are things you can do to keep your home sale moving forwards. 

Your first job is to secure the mortgage that you had agreed in principle. It usually takes around four weeks for a bank to formally give you your mortgage offer, and for you to pay to secure it.

Your solicitor will start all the legal and administrative work associated with transferring the property, known as conveyancing.

That includes arranging Stamp Duty, contacting the Land Registry, transferring money during the sale, and acting as a general intermediary between you, the lender and the seller. 

Once the terms of the sale have been agreed and your mortgage approved, the contracts are ready to be exchanged.

At that point, the sale becomes legally binding and you'll need to pay your 10% deposit.

On completion day, you'll be able to pick up the keys and open your new front door. Don’t forget to take a picture to remember this major milestone!

Still have questions about the buying process?

Find further help and step-by-step information in our complete buying guide.