Last reviewed: June 2026
TL;DR- First time buyers are defined by HMRC as those who have never previously owned a residential property anywhere in the world - joint buyers both need to meet this definition for stamp duty relief.
- Deposits of 5-10% are available through standard lender products and government-backed schemes; 95% LTV products carry higher rates.
- Stamp duty relief applies to first time buyers in England and Northern Ireland on purchases up to £500,000 as of 2026.
- The Lifetime ISA provides a 25% government bonus on savings up to £4,000 per year, usable toward a first home purchase.
Who Qualifies as a First Time Buyer?
For stamp duty land tax (SDLT) relief purposes, HMRC defines a first time buyer as an individual who has never previously owned a freehold or leasehold interest in a residential property in the UK or abroad. Where two or more people are purchasing jointly, all buyers must meet the first time buyer definition for the stamp duty relief to apply.
Individual mortgage lenders may apply their own definitions of first time buyer status for product eligibility purposes, which may differ from the HMRC definition. Applicants who have previously owned a property but do not currently own one may be treated as first time buyers by some lenders and as home movers by others.
Deposit Requirements and LTV
Most residential mortgage lenders in the UK require a minimum deposit of 5-10% for first time buyers. Products at 95% LTV (5% deposit) are available but typically carry higher interest rates than products at lower LTV ratios, reflecting the greater risk to the lender if the property value falls. The difference in rate between 90% and 95% LTV products can be significant - comparing total cost of credit rather than headline rate is important.
The Bank of England's Mortgage Guarantee Scheme - which underpinned the availability of 95% LTV products - has been extended or replaced by successor government initiatives at various points. The current availability of government-supported 95% LTV products should be checked via GOV.UK for the latest position.
Stamp Duty Relief for First Time Buyers
First time buyers purchasing in England benefit from SDLT relief. Under current rules, no SDLT is payable on the first £425,000 of a first home purchase, with 5% payable on the portion between £425,000 and £500,000. Purchases above £500,000 do not qualify for first time buyer relief and standard SDLT rates apply. These thresholds were confirmed in the 2024 Autumn Budget and remain in force for 2026. Scotland, Wales and Northern Ireland have separate property transaction taxes with their own first time buyer provisions - these should be checked via the relevant tax authority.
Lifetime ISA for First Time Buyers
The Lifetime ISA (LISA) is a government savings scheme that provides a 25% bonus on savings contributions up to £4,000 per year, giving a maximum annual bonus of £1,000. LISA funds can be used toward the purchase of a first home with a purchase price of up to £450,000. The account holder must be between 18 and 39 when the LISA is opened. Withdrawals for any purpose other than first home purchase or retirement before age 60 incur a withdrawal penalty that reduces the fund below the amount originally saved.
The £450,000 purchase price cap on LISA use has not been updated since the LISA was introduced in 2017, while property prices in many parts of the UK have risen significantly. Prospective buyers in higher-priced areas should check whether the property they intend to purchase falls within the LISA eligibility cap before relying on LISA savings as part of their deposit.
Shared Ownership as an Alternative
Shared ownership allows first time buyers to purchase a share of a property - typically between 10% and 75% - and pay rent on the remaining share owned by the housing association. A mortgage is required only on the share being purchased. First time buyers with limited deposits who cannot afford full market purchase may find shared ownership accessible, though the combined mortgage and rent payment, service charges and the terms of the lease should be assessed carefully before proceeding.
Lender Affordability Assessment
First time buyer mortgage applications are subject to the same FCA MCOB affordability assessment as any other residential mortgage. Lenders assess income, outgoings, existing debts and the impact of a stressed interest rate on affordability. First time buyers who have previously rented may find that their rental payment history is taken into account by some lenders as evidence of ability to manage housing costs. The FCA has encouraged lenders to use rental payment data in affordability assessments where it supports the application.
Frequently Asked Questions
Can I use a gifted deposit from family for a first time buyer mortgage?
Yes. Most lenders accept gifted deposits from family members, provided the donor confirms the funds are a gift and not a loan and that they have no interest in the property. Lenders require a gifted deposit letter and may ask for evidence of the source of the funds. The gift must be from an acceptable donor - lenders typically require this to be a close family member.
What is the Help to Buy ISA and can I still open one?
The Help to Buy ISA closed to new applicants in November 2019. Existing account holders can continue saving into their Help to Buy ISA and claim the government bonus when purchasing a first home. The bonus is claimed at completion via the solicitor and is paid directly to the lender. The maximum property purchase price for Help to Buy ISA use is £250,000 outside London and £450,000 in London.
Does having student loan debt affect first time buyer mortgage eligibility?
Student loan repayments are treated as a committed expenditure and deducted from assessable income in the FCA affordability assessment. This reduces the maximum loan amount the borrower can qualify for. The impact varies depending on income level and repayment plan type. Lenders use the monthly student loan repayment figure in their affordability model rather than the total outstanding student loan balance.
Are first time buyers eligible for buy-to-let mortgages?
Most standard buy-to-let mortgage lenders require the borrower to own or have owned a residential property - which first time buyers, by definition, have not. Some specialist BTL lenders do offer products to first time buyer landlords, but these typically carry stricter criteria and higher rates. Most first time buyers purchasing a property to live in would not qualify for a BTL mortgage on that property.
