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How much deposit do I need to buy a house?

To buy a house, you’ll usually need a 10% deposit.

So, for a property costing £200,000, you’d need a deposit of £20,000.

However, your deposit is only one piece of the puzzle when buying a house for the first time.

In this first-time homebuyer guide, we explain everything else you need to know…

Who qualifies as a first-time buyer?

To be classed as a first-time buyer, you must have never previously owned a residential property.

That includes:

  • A property that is or was your main residence
  • A buy-to-let property that you rent out
  • A property you inherited
  • An overseas property

First-time buyer status only applies to residential properties, so if you’ve previously owned a commercial property but not a residential one, you’d still be classed as a first-time buyer.

If you’re buying with someone else, they must also be classed as a first-time buyer for you to qualify.

If your partner has previously owned a property, neither of you will be classed as first-time buyers.

What do you need when buying a house for the first time?

When buying a house for the first time, you’ll need to think about:

1. Your deposit

Saving a deposit large enough to buy your first home is one of the biggest tasks you’ll face as a first-time buyer.

A 10% deposit based on average property prices in the UK at the time of writing would be:


Average property price

10% deposit

North East



Yorks & Humber



North West



East Midlands



West Midlands



East of England









South West



South East



Here are five things you can do to help you save quicker and get you closer to that first property purchase…

1. Move back in with your parents

If you’re renting a property, your biggest monthly outgoing is certain to be rent paid to your landlord.

If you can move back in with parents temporarily, this can really help speed up your saving quest.

Let’s say you’re paying £700 a month in rent over 12 months – that’s £8,400 that could be sitting in your deposit fund, not to mention the additional money you’d save on bills, council tax and other expenses.

Moving back in with mum and dad, even with paying a small amount towards housekeeping each month, could help you save more money and save it quicker.

2. Cut down everyday spending

We all spend money on things we could do without.

But it’s not until you add up your spending that you see the real picture.

If you’re spending £3.00 every day on a supermarket meal deal during your lunch hour, that could equate to around £700 a year on sandwiches, drinks, and packets of crisps.

By making your lunch at home, you’ll save money which could boost your deposit.

Other areas you can save big money include your car.

Do you need it?

Cars are hugely expensive – with fuel, maintenance, insurance, road tax and MOTs all hitting you hard in the pocket.

If good transport links are available near you, getting the train or jumping on a bus could prove more cost-effective and help you save even more towards your first home.

3. Earn from your spending

Of course, there are some things you simply must spend money on.

A mobile phone is a must-have item these days, while you’ll need to buy clothing and do a weekly food shop.

But you can make those outgoings work harder for you by using a cashback credit card.

Credit cards like these mean you can earn cash credits on what you spend, but to get the full benefit you must pay off the card’s balance in full each month.

Failing to do so could affect your credit rating and the interest you’ll pay could outweigh the cashback incentive.

However, using a credit card sensibly and paying off the balance each month can help boost your credit rating, which will help when you come to apply for a mortgage.

As well as cashback credit cards, supermarkets often run points schemes where you can use what you earn to buy items – this can help reduce your weekly shop bills and that money can go straight into your savings.

4. Increase your income

You could consider an evening or weekend job if you want to pick up the pace of your savings quest.

While it’s important to have time to rest and relax, a second job, even for a few months, could get you to your deposit target quicker.

Alternatively, you could look to make some additional money by freelancing, although you would need to factor in additional income tax liabilities.

Finally, if you have items you can sell, this can also help top up your savings.

Sites like eBay and Facebook marketplace are great places to sell the things you don’t need and make some additional cash.

5. Save your money in a Lifetime ISA

You can save up to £4,000 in a Lifetime ISA each year and the government will add an additional 25%.

So, for £4,000 saved, you’ll end up with £5,000.

Once you’ve had the ISA for at least 12 months, you can use the money to buy a property costing up to £450,000.

Be aware though: Lifetime ISA government bonuses are only available if you withdraw your ISA cash:

  • To buy your first home
  • When you’re aged 60 or over
  • When you’re terminally ill with less than 12 months to live

If you withdraw your ISA pot for anything else, you won’t receive the 25% government bonus.

Bank account savings are also options, while you can save up to £20,000 per tax year into a tax-free cash ISA, too.

2. A first-time buyer mortgage

Mortgages for first-time buyers can be daunting and confusing.

But it’s important you understand how your mortgage will work when buying a property for the first time:

Understanding loan-to-value

Loan-to-value (LTV) refers to the size of your mortgage against the value of your property and is a key metric when buying a property for the first time.

For example, if you’re buying a property for £200,000 and you have a 15% deposit of £30,000, your mortgage will cover the other 75%, or £170,000.

This means you’ll have an LTV of 75%.

The lower your LTV, the easier your mortgage application will generally be, as your lender will be taking on less risk.

A lower LTV also means you should also get access to better mortgage interest rates, meaning your monthly repayments will be lower.

Mortgage agreement in principles

Before you start searching for your first property, you should get what’s called a mortgage agreement in principle (AIP),

An AIP outlines what your lender is prepared to loan you on condition of your mortgage application being successful.

AIPs can usually be obtained by providing basic information to a lender, who will let you know the size of the mortgage you may be able to get.

Having an AIP shows sellers that you’re a serious buyer and can put you in a good position when negotiating.

Different types of mortgages

From fixed rate mortgages and variable rate loans to repayment and interest-only mortgages, there’s a lot of confusion for first-time buyers.

The different types of mortgages you’ll come across when buying for the first time will include:

  • Fixed rate mortgages, where the interest rate is the same for a set period
  • Variable rate mortgages, which can go up or down at any time, often in line with the Bank of England base rate

Variable rate mortgages include:

  • Tracker mortgages, which track the Bank of England base rate and can rise or fall, meaning your monthly payments can go up or down
  • Standard Variable Rate (SVR) mortgages where you pay your lender’s SVR, which can go up or down
  • Discounted rate mortgages, where you pay a rate that is discounted off your lender’s SVR

You’ll may also be able to choose between a repayment mortgage and an interest-only mortgage.

With a repayment mortgage, your monthly repayments cover some of the capital you’ve borrowed and some of the interest.

This means when you reach the end of your mortgage term, you’ll have nothing else to pay.

An interest-only mortgage, however, sees your monthly payments cover only the interest.

This means when your term is up, you’ll still need to repay the capital.

Interest-only mortgages come with cheaper monthly repayments, but are higher risk – so as a first-time buyer, it’s likely you’ll only be offered a mortgage on a repayment basis.

What your lender will need

When you apply for a mortgage, your lender will need:

  • Proof of your identity
  • Proof of your address
  • Proof of your income, including payslips, P60, or accounts if you’re self-employed
  • Proof of incomings and outgoings through bank statements

All of this helps your lender to assess your suitability for a mortgage and whether it will be affordable to you.

Getting your finances in order

Mortgage lenders use strict financial and affordability checks to assess your mortgage application.

So, having your finances in good shape is vital before you apply.

One of the areas your lender will look at is your credit history and report.

So, before you submit your mortgage application, you should:

  • Make sure all your bills are being paid on time
  • Pay down any debt, such as credit or store cards
  • Avoid applying for more credit
  • Close any credit accounts you no longer use
  • Make sure all your credit report details are correct

3. Stamp duty

As a first-time buyer, whether you must pay stamp duty will depend on the purchase price of the property you’re buying.

First-time buyers are entitled to increased relief from stamp duty compared with existing or previous property owners.

This means you’ll pay no stamp duty on the first £425,000 of your property’s purchase price, up to a maximum price of £625,000.

If your property is costing you between £425,001 and £625,000, you’ll pay stamp duty on the amount above £425,000 at 5%.

If the property you’re buying is costing you more than £625,000, you’ll pay the normal rates of stamp duty below:

Portion of purchase price

Stamp duty rate

£0 - £250,000


£250,001 - £925,000


£925,001 - £1.5m


£1.5m +


How stamp duty is paid

If you owe any stamp duty on your first property purchase, you’ll need to provide your solicitor with the amount required and they will pay this on your behalf once your purchase is complete.

4. Other first-time buyer costs

Your mortgage and deposit won't be the only big sums of money to consider when buying your first home.

You'll also have to factor in:

Mortgage fees

There are several fees you may need to pay when you take out a mortgage for the first time, including:

  • Mortgage arrangement fee – Up to £2,000
  • Booking fee – £100 to £250
  • Valuation fee – £250 to £1,500
  • Early Repayment charge – 1% to 5% of the outstanding mortgage amount

Booking fees are sometimes included within the arrangement fee, which can either be added to the mortgage loan or paid up-front.

Adding an arrangement fee to your mortgage loan will mean you pay interest on the amount, while doing so will increase your loan-to-value (LTV) and could affect your affordability.

The valuation fee is payable up-front and covers the cost of your lender undertaking their own valuation of the property you’re buying.

This is to ensure the property is worth at least the amount they’ll be lending you.

Early repayment charges, meanwhile, may apply if you repay your mortgage during your mortgage product term.

For example, if you take out a three-year fixed rate mortgage and redeem the mortgage during that time, you may have to pay an early repayment charge.

Solicitor fees

When you buy a property for the first time, you’ll need a solicitor to complete the legal work for you.

This is known as conveyancing and the fees your solicitor will charge can vary depending on:

  • The property’s value
  • Whether it’s a freehold or leasehold property

As well as their fee, your solicitor will also charge you for other costs, known as disbursements, which they pay on your behalf before recharging them to you once your purchase is completed.

Disbursements cover things like:

  • Searches
  • Anti-money laundering checks
  • Bank transfer fees
  • Land Registry charges

Survey fees

When buying a property, having a survey carried out can provide excellent peace of mind that what you’re buying is structurally sound.

The fee for a survey will depend on the level of survey you have:

  • RICS Level One – the most basic and cheapest survey, suitable for modern, standard properties in good condition
  • RICS Level Two – a mid-level survey for properties in good condition and of less than 50 years old
  • RICS Level Three – a full structural survey suitable for older properties of more than 50 years, or those with a non-standard design or construction

A Level One survey usually costs between £300 and £900, while a Level Two can cost between £400 and £1,000.

A full structural Level Three survey, meanwhile, could cost between £600 and £1,500.


As soon as you exchange contracts with your seller, your purchase becomes legally binding.

At that point, your mortgage lender may insist that you have an adequate buildings insurance policy in place to protect your new home against damage or destruction caused by flooding, fire, or storms.

As well as buildings insurance, other insurance you might wish to consider includes:

  • Life insurance, to cover your mortgage should you pass away before it’s paid off
  • Critical illness insurance, which covers your mortgage should you be diagnosed with a serious illness
  • Income protection insurance, which can help you make your monthly repayments if you’re unable to work due to redundancy, illness, or an accident
  • Contents insurance, which protects your belongings against loss, theft, or damage


Before you move into your first home, you’ll need to decide if you wish to hire a removals company to help you.

The cost of removals will depend on:

  • The amount and size of belongings you have, and the size of the van and staff required
  • The distance between your current home and your new property

How to buy your first home

Follow this great advice for first time buyers:

1. Establish your dream home wish list

Staying focused on your property search is key – and considering properties that are either unsuitable or unaffordable can waste vital time.

Draw up a list of the kind of property that will suit your needs, considering:

  • If you need a house or a flat
  • How many bedrooms you require
  • The amount of outdoor space you need
  • How many bathrooms you want
  • If you need off-street parking as well as a driveway
  • If you are happy undertaking property maintenance

2. Be prepared to compromise

As a first-time buyer, it’s unlikely you’ll find absolutely everything you’d love to have in your first home – and that means you may have to compromise in certain areas.

Draw up a list of the things you must have and those that are ‘nice-to-haves’.

3. Decide on your ideal location

Consider the following:

  • How far can you realistically commute to work?
  • Are you planning to start a family? If so, investigate the best school catchments
  • If you are commuting, do you need to be close to a train station or main road?
  • How important is it that you are close to family and friends?
  • Are you keen to stay close to the social life of a town or city, or are you looking for a more peaceful location?

4. Don’t be afraid to ask questions

Asking questions is crucial when viewing potential properties.

Here are some of the most important questions to ask the estate agent when viewing a house:

  • Why is the owner selling?
  • How long has the property been up for sale?
  • How many viewings have there been?
  • Have there been any offers?
  • When was the boiler last serviced?
  • When were the electrics installed?
  • What Energy Performance Certificate rating does the property have?
  • What would be included in a sale?

If you can, arrive an hour early for your viewing, too, and speak to neighbours or local shop staff about the area.

Spending time in the area will also help you decide if the property you’ve viewing is the right one for you.

5. Be ready to negotiate

Negotiating with a seller over a property’s purchase price can be one of the most nerve-wracking aspects of being a first-time buyer.

Knowing where to start with an opening offer can be tricky, but you should consider the following:

The seller's position

Find out from the agent how keen they are to move quickly. Are they already in a process to buy somewhere else?

How long the property has been up for sale

If the house you are offering on has been up for sale for some time, a lower offer may be more acceptable to the vendor.

The competition

If there are lots of other buyers keen on the house of your dreams, you may have to consider an offer nearer to the asking price to secure it.

If you have set yourself a strict budget, don't be tempted to go over that figure.

As much as you may love the property, there will always be other opportunities at other properties.

6. Protect yourself with a survey

While first impressions count, a survey can reveal any nasty surprises you may have missed during the viewing process.

Arrange a survey of the property you are buying once your offer is accepted.

This will give you peace of mind that the home you are buying is structurally in good order.

If a costly, much-needed repair is outlined in the survey, such as a new roof, you may be better off accepting that the property is not right for you after all.

7. Be proactive during conveyancing

The conveyancing process begins after your offer is accepted and can be the longest part of the property buying process.

To help things move along at a good pace, it’s important for you to be proactive.

That means:

  • Providing your solicitor with documentation they request in good time
  • Answering queries from your solicitor quickly and efficiently
  • Dealing with your mortgage application and requests from your lender quickly

Further reading…

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