First-Time Buyer

First-time buyers are a significant part of the housing market and often face challenges related to affordability and securing mortgages. Governments provide incentives to first-time buyers to help them onto the property ladder, making it easier to buy a home without significant upfront costs.

First-time buyer schemes can make a substantial difference in the cost of purchasing a property, especially in regions with high house prices.

Stamp Duty Relief: First-time buyers in England and Northern Ireland do not have to pay Stamp Duty on properties priced up to £425,000 (and up to £625,000 at a reduced rate). This provides significant savings for buyers entering the market.

Government Schemes: Programs like Help to Buy or Shared Ownership are specifically designed to assist first-time buyers. These schemes may offer loans to cover part of the property price or allow buyers to purchase a portion of the property and rent the rest.

Mortgage Offers: Many lenders offer specific mortgage products for first-time buyers, often with lower deposit requirements or favourable interest rates, making it easier to secure financing.

Help to Buy: A government scheme offering first-time buyers an equity loan to help purchase a home with a smaller deposit.

Shared Ownership: A scheme that allows buyers to purchase a share of a property and pay rent on the remaining portion, with the option to buy more of the property over time.

Stamp Duty Land Tax (SDLT): A tax paid on property purchases, from which first-time buyers may be exempt up to a certain threshold.

Advantages: First-time buyers can benefit from government support, reduced taxes, and special mortgage products, making homeownership more accessible. Programs like Help to Buy or Stamp Duty relief significantly lower the upfront costs. Additionally, first-time buyers have no property to sell, making them more attractive to sellers who want to avoid complicated chains.

Disadvantages: Despite the incentives, first-time buyers may still face difficulties securing a mortgage, especially if they have limited savings or a lack of credit history. Property prices in certain areas may also remain out of reach even with government assistance.

First-time buyers often look for affordable homes in areas where government incentives and first-time buyer schemes are available. Many first-time buyers opt for smaller homes or properties in regeneration areas where prices are lower and the potential for future growth is higher.

Scenario: A first-time buyer looking to purchase a flat in London takes advantage of the Help to Buy scheme, which allows them to buy the property with only a 5% deposit while the government provides a 20% equity loan.

What is the Stamp Duty exemption for first-time buyers?

First-time buyers in England and Northern Ireland do not have to pay Stamp Duty on properties costing up to £425,000. For properties priced between £425,001 and £625,000, a reduced rate applies on the portion over £425,000.

Can I qualify as a first-time buyer if I previously owned a property abroad?

No, to qualify as a first-time buyer, you must have never owned a property in the UK or abroad.

In 2023, the average age of a first-time buyer in the UK was 34, with London and the Southeast seeing higher ages due to higher property prices. First-time buyers account for roughly one-third of property purchases in the UK, driven by government incentives like Stamp Duty relief and Help to Buy.