Buying a home is the largest financial transaction most people will ever make. This guide walks you through every step of the process in the UK — from saving a deposit to getting the keys — with real numbers, government schemes, and practical tips.
Step 1: Save for Your Deposit
Your deposit is the lump sum you pay upfront. The larger your deposit, the less you need to borrow and the better mortgage rates you will be offered.
How Much Do You Need?
| Deposit % | On a £250,000 Property | On a £300,000 Property |
|---|---|---|
| 5% | £12,500 | £15,000 |
| 10% | £25,000 | £30,000 |
| 15% | £37,500 | £45,000 |
| 25% | £62,500 | £75,000 |
Most lenders require a minimum 5% deposit, but 10–15% unlocks significantly better interest rates. A 25% deposit gives you access to the cheapest deals available.
How Long to Save?
If you save £500 per month:
- 5% deposit (£12,500): 25 months (just over 2 years)
- 10% deposit (£25,000): 50 months (just over 4 years)
- 15% deposit (£37,500): 75 months (just over 6 years)
Saving with a partner halves these timescales.
Government Schemes
The UK government offers several schemes to help buyers get on the property ladder.
Lifetime ISA (LISA)
- Open one if you are 18–39.
- Save up to £4,000 per year.
- The government adds a 25% bonus — up to £1,000 per year.
- Must be used for a first home (up to £450,000) or retirement.
- Best tool for first-time buyers: A couple each contributing £4,000/year gets £2,000 in free bonuses annually.
Shared Ownership
- Buy 25–75% of a property and pay rent on the remaining share.
- Requires a smaller deposit and mortgage.
- You can staircase (buy more shares) over time.
- Good for buyers in high-cost areas who cannot afford a full purchase.
First Homes
- New-build homes sold at a 30–50% discount to first-time buyers.
- Eligibility based on household income (typically under £80,000, or under £90,000 in London).
- The discount is locked in — when you sell, the next buyer also gets the discount.
Understanding Mortgages
A mortgage is a loan used to buy a property. You repay it over 25–35 years, with interest.
How Much Can You Borrow?
Most lenders offer 4–5 times your annual salary. With two incomes, you can borrow more.
| Salary | 4× Salary | 4.5× Salary | 5× Salary |
|---|---|---|---|
| £25,000 | £100,000 | £112,500 | £125,000 |
| £30,000 | £120,000 | £135,000 | £150,000 |
| £35,000 | £140,000 | £157,500 | £175,000 |
| £40,000 | £160,000 | £180,000 | £200,000 |
Two incomes example: £30,000 + £25,000 = £55,000 combined. At 4.5×: £247,500 borrowing power.
Lenders also assess affordability — your existing debts, commitments, and spending habits affect how much they will lend.
Mortgage Types
Fixed rate: Your interest rate stays the same for 2, 3, or 5 years. Predictable payments, ideal for budgeting.
Variable rate: Rate can change at any time, usually following the Bank of England base rate. Lower initial rates but less certainty.
Tracker rate: Follows the base rate at a set margin (e.g., base rate + 0.75%). Rises and falls with the market.
Discount rate: A discount off the lender’s standard variable rate (SVR). Can change at the lender’s discretion.
Tip: First-time buyers almost always choose a fixed rate for the security of predictable payments. A 2 or 3-year fix gives flexibility to remortgage when your circumstances change.
Buying Costs Beyond the Deposit
Many buyers are caught out by the additional costs. Budget for all of these:
| Cost | Typical Range |
|---|---|
| Deposit | 5–25% of property price |
| Stamp duty | £0–£30,000+ (see below) |
| Legal fees (conveyancing) | £1,000–£2,000 |
| Survey | £300–£1,500 |
| Mortgage arrangement fee | £0–£2,000 |
| Mortgage valuation fee | £0–£500 (often free) |
| Removal costs | £300–£2,000 |
| Buildings insurance | £100–£300/year |
Stamp Duty Land Tax (SDLT)
Stamp duty is a tax paid on property purchases. Rates depend on whether you are a first-time buyer and the property price.
First-Time Buyers
| Property Price | Stamp Duty Rate |
|---|---|
| Up to £425,000 | 0% |
| £425,001–£625,000 | 5% on the portion above £425,000 |
| Over £625,000 | Standard rates apply (no first-time relief) |
Non-First-Time Buyers
| Property Price | Stamp Duty Rate |
|---|---|
| Up to £250,000 | 0% |
| £250,001–£925,000 | 5% on the portion above £250,000 |
| £925,001–£1,500,000 | 10% on the portion above £925,000 |
| Over £1,500,000 | 12% on the portion above £1,500,000 |
Stamp Duty Examples
- First-time buyer, £400,000 property: £0 stamp duty
- First-time buyer, £500,000 property: £75,000 × 5% = £3,750
- Non-first-time buyer, £300,000 property: £50,000 × 5% = £2,500
- Non-first-time buyer, £500,000 property: £250,000 × 5% = £12,500
Tip: You do not pay stamp duty on the first £425,000 as a first-time buyer. This is a significant saving — use it to your advantage.
The Buying Process
Here is the step-by-step timeline from finding a property to getting the keys:
1. Find a Property (Weeks 1–6)
Search on Rightmove, Zoopla, and OnTheMarket. Visit properties in person. Consider commute times, schools, and local amenities.
2. Make an Offer (Week 6)
Once you find the right property, make an offer through the estate agent. Most properties have room for negotiation — start 5–10% below the asking price. If accepted, the property is “sold subject to contract” (SSTC).
3. Get a Mortgage Agreement in Principle (Week 6–7)
Before making an offer, get an Agreement in Principle (AIP) from a lender. This shows sellers you are a serious buyer and can borrow the required amount. An AIP is not a guarantee, but it strengthens your position.
4. Apply for a Mortgage (Week 7–8)
Formally apply for your mortgage. The lender will:
- Check your credit score and income
- Value the property (mortgage valuation)
- Offer you terms and a rate
5. Instruct a Solicitor (Week 7–8)
Your solicitor (conveyancer) handles the legal side — checking the property title, raising enquiries, managing the exchange of contracts, and registering you as the new owner. Shop around for fees; they vary significantly between firms.
6. Get a Survey (Week 8–9)
Do not skip the survey. It can reveal hidden problems that cost thousands to fix — and give you leverage to renegotiate the price.
- Homebuyer’s Report (Level 2): £300–£500. Suitable for most properties. Covers condition, valuation, and key issues.
- Full Structural Survey (Level 3): £500–£1,500. Essential for older, larger, or unusual properties. Provides a detailed structural assessment.
7. Exchange Contracts (Week 10–11)
Once the mortgage is approved, the survey is satisfactory, and all legal checks are complete, you exchange contracts. At this point:
- You are legally committed to buy.
- You pay the deposit (usually 10% of the purchase price).
- A completion date is set (typically 1–2 weeks after exchange).
8. Complete and Get the Keys (Week 12)
On completion day, the remaining funds are transferred to the seller’s solicitor. You collect the keys and the property is yours. You are now a homeowner.
Total timeline: Typically 8–12 weeks from offer acceptance to completion.
Negotiating the Price
Most property prices have room for negotiation. Here is how to approach it:
- Research comparable sales: Check what similar properties in the area have recently sold for (available on Rightmove and HM Land Registry).
- Start low: Offer 5–10% below the asking price. The worst they can say is no.
- Use survey results: If the survey reveals issues, use this as leverage to renegotiate.
- Be ready to walk away: If the price does not represent good value, there are other properties.
- Show you are a serious buyer: A mortgage Agreement in Principle and a solicitor already instructed makes you a more attractive buyer.
Conveyancing
Conveyancing is the legal process of transferring property ownership. You need a solicitor or licensed conveyancer.
What they do:
- Check the property’s legal title
- Raise enquiries with the seller’s solicitor
- Search for local authority issues (planning, environmental)
- Draft and exchange contracts
- Handle the transfer of funds
- Register you with HM Land Registry
Costs: £1,000–£2,000 including disbursements (search fees, Land Registry fee, etc.).
Tip: Do not choose the cheapest option without checking reviews. A slow or unreliable solicitor can delay or even derail your purchase.
Worked Example: First-Time Buyer
Here is a worked example for a first-time buyer with a partner:
| Item | Details |
|---|---|
| Your salary | £30,000 |
| Partner’s salary | £25,000 |
| Combined salary | £55,000 |
| Mortgage (4.5× combined) | £247,500 |
| Deposit (10%) | £27,500 |
| Property price | £275,000 |
| Stamp duty | £0 (first-time buyer, under £425,000) |
| Legal fees | £1,500 |
| Survey (homebuyer’s report) | £400 |
| Mortgage arrangement fee | £1,000 |
| Removal costs | £500 |
| Total upfront costs | £30,900 |
The couple needs £30,900 upfront: £27,500 deposit plus £3,400 in fees. Their monthly mortgage payment at 4.5% interest over 25 years would be approximately £1,360.
Tips for Home Buyers
- Save the biggest deposit possible: Every extra thousand pounds reduces your loan-to-value ratio, unlocking better mortgage rates and saving thousands in interest over the life of the mortgage.
- Get a mortgage Agreement in Principle before house hunting: It shows sellers you are serious and prevents disappointment if you cannot borrow as much as you expected.
- Never skip the survey: A £400 survey can save you from a £20,000 repair bill. If issues are found, you can renegotiate the price or walk away.
- Budget for all costs: The deposit is only part of the picture. Stamp duty, legal fees, surveys, and removal costs add up to several thousand pounds.
- Negotiate the price: Most properties sell for less than the asking price. Do not be afraid to make a lower offer.
- Use a Lifetime ISA: If you are a first-time buyer aged 18–39, a LISA gives you a 25% government bonus on up to £4,000 per year. A couple can earn £2,000 in free money annually.
- Consider the total cost: Factor in council tax, buildings insurance, maintenance, and commute costs when choosing where to buy. A cheaper property far from work may cost more overall than a slightly more expensive one nearby.
References
- MoneyHelper — moneyhelper.org.uk
- Which? — which.co.uk
- GOV.UK Stamp Duty — gov.uk/stamp-duty-land-tax
- GOV.UK Check MOT History — gov.uk/check-mot-history
- Rightmove — rightmove.co.uk
- Zoopla — zoopla.co.uk