First time buyers in England and Northern Ireland pay no stamp duty on properties up to £300,000, and 5% on the portion up to £500,000, since the relief threshold reverted from £425,000 on 1 April 2025. Scotland and Wales use separate systems, and the average UK first-time buyer deposit reached £61,090 in 2024, according to Halifax.
TL;DR · LAST REVIEWED 9 July 2026
- Stamp duty relief threshold corrected: first-time buyers in England and Northern Ireland pay 0% up to £300,000 and 5% to £500,000, with relief lost entirely above £500,000 (reverted from the temporary £425,000/£625,000 figures on 1 April 2025).
- Scotland's LBTT first-time buyer relief has no upper price cap, unlike England: 0% up to £175,000, then standard bands apply. Wales has no first-time-buyer-specific relief at all.
- The average UK first-time buyer deposit reached £61,090 in 2024 (Halifax), around 20% of the average purchase price; a 10% deposit on a typical property is about £23,000 (Nationwide).
- Deposit Unlock, the 5%-deposit new-build scheme, closed to new completions in April 2026; current low-deposit routes include standard 95% LTV mortgages, First Homes and guarantor or family-backed products.
KEY FACTS
- SDLT first-time buyer relief (England & NI, from 1 April 2025): 0% up to £300,000, 5% on £300,001-£500,000, no relief above £500,000
- Scotland LBTT first-time buyer relief: 0% up to £175,000 (vs £145,000 standard), no upper price cap, maximum saving £600
- Wales LTT: no first-time-buyer-specific relief; standard £225,000 nil-rate band applies to all buyers
- Average UK first-time buyer deposit: £61,090 in 2024 (Halifax), approximately 20% of purchase price
- Average first-time buyer house price: £226,000 UK-wide (January 2026), ranging from £139,000 (North East) to £472,000 (London)
- Deposit Unlock scheme closed to new completions in April 2026; existing mortgage offers are still honoured
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.
How Much Deposit Do You Actually Need? Worked Examples
Most residential mortgage lenders in the UK require a minimum deposit of 5-10% for first time buyers. The table below shows what that looks like in practice across a range of purchase prices.
| Purchase Price | 5% deposit | 10% deposit | 15% deposit | 20% deposit |
|---|---|---|---|---|
| £150,000 | £7,500 | £15,000 | £22,500 | £30,000 |
| £200,000 | £10,000 | £20,000 | £30,000 | £40,000 |
| £250,000 | £12,500 | £25,000 | £37,500 | £50,000 |
| £300,000 | £15,000 | £30,000 | £45,000 | £60,000 |
| £400,000 | £20,000 | £40,000 | £60,000 | £80,000 |
| £500,000 | £25,000 | £50,000 | £75,000 | £100,000 |
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, so comparing total cost of credit rather than headline rate is important.
Average First Time Buyer Deposits and House Prices Across the UK
The average UK first-time buyer deposit was £61,090 in 2024, around 20% of the average purchase price, according to Halifax data. More recent UK Finance figures, broken down by nation, show significant regional variation:
| Nation | Average First-Time Buyer Deposit |
|---|---|
| England | £63,855 |
| Northern Ireland | £40,528 |
| Wales | £35,572 |
| Scotland | £30,551 |
The average house price paid by a UK first-time buyer was £226,000 in January 2026, up 1.3% year on year. Regional prices vary sharply: £472,000 in London, £299,000 in the South East, down to £155,000 in Scotland and £139,000 in the North East, the UK's most affordable region for first-time buyers. On a typical UK first-time buyer property, a 10% deposit works out at around £23,000, according to Nationwide's affordability research, which also found that saving 10% of average take-home pay each month would take a first-time buyer close to six years to reach that figure.
Low-Deposit Mortgage Schemes: What's Actually Available in 2026
Standard 95% LTV mortgages remain the most widely available low-deposit route in 2026, offered directly by many mainstream lenders without needing to go through a separate government or industry scheme. Beyond that, several first-time-buyer-specific routes exist, though availability changes regularly:
Deposit Unlock, the industry-backed scheme that let buyers purchase a new-build home with a 5% deposit via a small number of participating lenders and housebuilders, closed to new completions in April 2026. Buyers with an outstanding mortgage offer under the scheme will still be honoured by their lender, but it is no longer available to new applicants.
First Homes offers new-build properties to first-time buyers and key workers at a discount of at least 30% below market value, with the discount remaining attached to the property when it is eventually resold. Eligibility typically requires a household income below £80,000 (£90,000 in London).
Guarantor and family-backed mortgages, such as joint borrower sole proprietor (JBSP) products, let a family member support a first-time buyer's application without being named as an owner of the property, which can increase the amount a lender is willing to advance or reduce the deposit needed. Kael Tripton's guide to Tembo mortgages covers one specialist broker operating in this space.
Stamp Duty Relief for First Time Buyers
First time buyers purchasing in England and Northern Ireland benefit from SDLT relief. Under the rules in force since 1 April 2025, no SDLT is payable on the first £300,000 of a first home purchase, with 5% payable on the portion between £300,001 and £500,000. Purchases above £500,000 do not qualify for first time buyer relief at all, and standard SDLT rates apply to the full purchase price. These figures replace the temporary £425,000 nil-rate threshold and £625,000 relief cap that applied between September 2022 and March 2025, which have now expired.
| Purchase Price | First-Time Buyer SDLT (England & NI) |
|---|---|
| £250,000 | £0 (under the £300,000 nil-rate threshold) |
| £300,000 | £0 (exactly at the threshold) |
| £350,000 | £2,500 (5% on the £50,000 above £300,000) |
| £425,000 | £6,250 (5% on the £125,000 above £300,000) |
| £500,000 | £10,000 (5% on the £200,000 above £300,000, the maximum relief allows) |
| £550,000 | £17,500 (no relief at all above £500,000; standard rates apply to the whole price) |
Because relief disappears entirely above £500,000 rather than tapering off, the difference between a £499,999 purchase and a £500,001 purchase is substantial: the lower price attracts a maximum of £9,999.95 in SDLT under the relief, while the higher price loses the relief altogether and reverts to standard rates on the whole amount.
Scotland, Wales and Northern Ireland: Different Rules Apply
Northern Ireland uses the same SDLT system as England, with the same £300,000/£500,000 first-time buyer thresholds described above. Scotland and Wales operate entirely separate property transaction taxes.
In Scotland, buyers pay Land and Buildings Transaction Tax (LBTT) rather than SDLT, administered by Revenue Scotland rather than HMRC. First-time buyer relief raises the standard 0% threshold from £145,000 to £175,000, saving up to £600. Unlike England, Scotland's relief has no upper price cap: a first-time buyer purchasing a £400,000 property in Scotland still benefits from the £175,000 nil-rate band before standard LBTT rates apply to the remainder.
In Wales, buyers pay Land Transaction Tax (LTT), administered by the Welsh Revenue Authority. Wales is the only UK nation with no first-time-buyer-specific relief: every buyer pays the same standard LTT rates regardless of first-time buyer status. The main-rate nil-rate band is £225,000, higher than England's non-FTB threshold, but without a dedicated first-time buyer discount on top.
Deposit requirements also vary regionally. Average first-time buyer deposits are lower in Scotland (£30,551) and Wales (£35,572) than in England (£63,855), reflecting generally lower average house prices. Scotland's own First Home Fund, a £10,000 equity loan for first-time buyers, has faced separate affordability questions in cities such as Edinburgh where prices have risen faster than the grant.
The 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.
Should You Use a Mortgage Broker?
A mortgage broker compares deals across the entire market, including products from lenders that do not deal directly with the public. For a first time buyer navigating deposit schemes, affordability criteria and regional tax rules for the first time, a broker also provides guidance, handles paperwork, and advocates on the buyer's behalf with the lender. Many brokers charge no fee to the buyer, being paid commission by the lender instead; others charge a fixed fee, typically £300 to £500, which can still be worthwhile if it results in a meaningfully better rate. Kael Tripton's comparison of first-time buyer mortgage brokers looks at several options in more depth.
Featured Partner Habito by Monzo Fee-free digital mortgage broker searching a wide range of UK lenders, including several first-time-buyer-specific products. Entire process online from comparison to mortgage offer, with qualified advisers throughout. 4.9/5 from over 9,800 Trustpilot reviews. Part of leading digital bank Monzo. FCA authorised: 714187. Free to buyers. No advice fee. No impact on your credit score at the initial stage. Check your optionsNo impact on credit score |
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.
First Time Buyers with Limited or Poor Credit History
A limited or poor credit history does not automatically rule out a first time buyer mortgage, though it narrows the range of lenders and products available. Some specialist lenders assess adverse credit applications individually, taking into account how long ago issues occurred, their severity, and whether they have since been resolved, though these products typically carry higher interest rates than mainstream deals. Building or repairing a credit score before applying, by registering on the electoral roll, keeping credit utilisation low and avoiding new credit applications in the months before a mortgage application, can widen the range of mainstream lenders willing to offer a standard rate.
Disclaimer: This article is for information only and does not constitute financial advice. Seek independent financial advice before making any decisions.
Frequently Asked Questions
RELATED GUIDES
DISCLAIMER
This article is for information only and does not constitute financial advice. Kael Tripton Ltd is an independent editorial publisher and is not authorised or regulated by the Financial Conduct Authority (FCA). This article was corrected and expanded on 9 July 2026: the previously published stamp duty relief threshold of £425,000 was the temporary figure that expired 31 March 2025 and has been replaced with the correct current threshold of £300,000. Habito by Monzo appears on this page as a Featured Partner. Seek independent financial advice before making any decisions. ICO registration ZC135439.
Frequently asked questions
How much stamp duty will I pay as a first time buyer in 2026?
In England and Northern Ireland, first time buyers pay no SDLT on the first £300,000 of a purchase, and 5% on the portion between £300,001 and £500,000. Above £500,000, no first-time buyer relief applies and standard rates are charged on the full price. This replaced the temporary £425,000/£625,000 thresholds, which expired on 1 April 2025.
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, typically 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 repayment figure in their affordability model rather than the total outstanding balance.
Can I get a first time buyer mortgage with bad credit?
It is more difficult but not impossible. Some specialist lenders offer mortgages to borrowers with adverse credit, though at higher interest rates and with a narrower range of products. Improving your credit score before applying, and using a broker familiar with specialist lenders, generally gives access to better deals than applying directly.
SOURCES
- GOV.UK, Stamp Duty Land Tax relief for land or property transactions – accessed 9 July 2026
- GOV.UK, Lifetime ISA – accessed 9 July 2026
- Revenue Scotland, LBTT3048: First-time buyer relief – accessed 9 July 2026
- FCA, Mortgage Consumer Information – accessed 9 July 2026
- Bank of England – accessed 9 July 2026
