I’m a first-time buyer looking for a home. What should I know?

From sky-high property prices to chipping away at the deposit fund, getting on the housing ladder in the UK as a first-time buyer is no mean feat.

According to figures from Gov UK, the average property now costs £282,000 nationwide, a figure that increases to £689,245 in London.

But there are still ways to get on the property ladder amid skyrocketing costs, from considering the power of shared ownership to making the most of your Help To Buy ISA or Lifetime Individual Savings Account.

There are also mortgage deals that’ll see you given up to £5,000 in cashback for signing, which certainly sweetens the bitter cost of rinsing your savings account.

Looking to get on the property ladder soon? Metro chatted to a property expert about all the perks first-time buyers in the UK can take advantage of.

Choose a mortgage deal that offers cashback – and don’t rule out shared ownership

Buying your first home doesn’t necessarily mean spending your hard-earned cash on the deposit, mortgage and any new furnishings: some developments will actually pay you to buy.

Take Royal Docks for example, where some building associations will offer cash incentives to encourage first-time buyers to move in.

At East River Wharf, there are £2,000 cash contributions currently on offer – though buyers will need to register their interest by October 31 to qualify. Just imagine the furniture you could spend that money on. Here, prices start at £96,875 for a 25% share of £387,500.

Elsewhere, Aqua Gardens offers a £5,000 cashback of one, two and three-bedroom shared ownership homes – but only if you use their recommended solicitor and broker, and exchange within 28 days. The clock is ticking!

‘With shared ownership you can purchase between 10% to 75% of a property and you can increase this share as and when you can afford to, reducing the rent owed in the process,’ Lomond CEO, Ed Phillips, tells Metro.

‘This method can be a great way for first-time buyers to get their first foot on the ladder in one form or another. However, it’s important to note that the smaller the deposit you place initially, the more interest you are likely to pay over the lifetime of your mortgage.’

Remember you’ll be covered by stamp duty land tax relief

This one isn’t something you’ll need to remember to do, as it’ll be applied automatically – but it’s a nifty help to first-time buyers regardless.

And that’s the stamp duty exemption, the future of which was outlined by chancellor Rachel Reeves as she delivered the Autumn 2024 Budget earlier this week. But how does it work?

‘Stamp duty is a tax paid to the government by homebuyers and, as it stands, first-time buyers are exempt from paying stamp duty on any purchase up to £250,000,’ Ed explains.

‘However, as of March next year, this threshold is set to reduce to £125,000. It’s also important to note that should you purchase over £6250,000, no first-time buyer relief is afforded and this threshold falls to £500,000 as of March next year.’

Make use of your Help To Buy ISA

Saving up for a deposit for your first home can place a hefty strain on your finances – and that’s if you’re able to manage it at all.

The Help To Buy ISA was technically abolished in November 2019, but if you successfully applied for one before then, you’ll be able to use any money you’ve put into it to buy your first home until December 2030.

‘The Help to Buy ISA has since been replaced by the Lifetime Individual Savings Account and if utilising it to form a savings pot, you can then use your savings on purchases of homes up to £450,000 – as long as you’re aged 18 to 39,’ Ed explains.

‘You can invest up to £4,000 a year with the government topping up your savings by 25%.’

…as well as the First Home Scheme & Deposit Unlock Scheme

The LISA scheme isn’t the only one to take note of, though. There’s also the First Home Scheme, which as Ed explains, ‘supports local first-time buyers and key workers to get a foot on the ladder with discounts of 30% compared to market price.’

Likewise, there are schemes in place to help reduce the initial cost of a deposit (which is relatively hefty, considering that, according to Zoopla, in 2023 the average was £34,500).

As Ed tells us, the Mortgage Guarantee Scheme is ‘aimed at increasing the supply of 5% deposit mortgages for credit-worthy households by supporting lenders through government backed guarantees on 95% mortgages and is due to run to 30th June 2025.’

Take out a life insurance policy

And finally, when it comes to buying a house for the first time, you’ll need to consider taking out a life insurance policy if you haven’t done so already.

While this isn’t always a legal requirement for getting on the ladder, it might give you (and your partner, if you’re buying as a couple) peace of mind, as well as a sense of financial protection.

As Legal and General point out, some lenders consider having a life insurance policy a ‘precondition’ for qualifying for a mortgage.

‘If you own a property, a mortgage is likely to be the biggest debt you leave behind should the worst happen, so having a policy in place can help give you peace of mind,’ their website reads.

‘If you have children, a partner, or other dependents living with you who rely on you financially, taking out mortgage life insurance could be considered [an] important expenditure.’

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