Buying your first home in the UK in 2026 is less about the asking price and more about the costs sitting behind it. This guide lays out the three that catch people out most: stamp duty, your deposit, and the Lifetime ISA that can add up to GBP 1,000 a year toward your purchase. Real 2026 rules, no jargon.
Stamp duty: what a first-time buyer actually pays
In England and Northern Ireland, first-time buyers pay the following on the purchase price (source: GOV.UK Stamp Duty Land Tax rules):
| Portion of the price | First-time buyer rate |
|---|---|
| Up to GBP 300,000 | 0 percent |
| GBP 300,001 to GBP 500,000 | 5 percent |
| Above GBP 500,000 | Standard rates, no first-time-buyer relief |
So a first home at GBP 295,000 costs you nothing in stamp duty, while one at GBP 400,000 costs 5 percent of the GBP 100,000 above the threshold, which is GBP 5,000. Knowing exactly where your target price sits against GBP 300,000 and GBP 500,000 changes your budget more than most people expect, and it is worth checking before you fall for a property just above a threshold.
Scotland and Wales run their own systems (Land and Buildings Transaction Tax and Land Transaction Tax), so if you are buying there, check the equivalent thresholds for your nation rather than the England and Northern Ireland figures above.
Your deposit: the number that decides your mortgage
Most first-time buyer mortgages want at least a 5 to 10 percent deposit, and a bigger deposit usually unlocks a lower interest rate. On a GBP 250,000 home, 10 percent is GBP 25,000. The gap between a 5 and a 10 percent deposit can be the difference between an affordable monthly payment and a stretched one, so it is worth modelling both before you commit.
The Lifetime ISA: up to GBP 1,000 a year toward your first home
A Lifetime ISA is one of the strongest tools a UK first-time buyer has. You can save up to GBP 4,000 a year into it, and the government adds a 25 percent bonus on top, up to GBP 1,000 a year. The money and bonus can go toward a first home costing up to GBP 450,000 (source: GOV.UK Lifetime ISA overview).
Two details that trip people up:
- The bonus goes into the pot that forms part of your completion funds. It is not a cheque you can hand over for your stamp duty bill directly, but because it boosts your deposit, it frees up your other savings to cover those costs.
- There are rules on how long the account must be open before you can use it for a home, so open one early even with a small amount to start the clock ticking.
A simple order to tackle it
- Set your target price and check it against the GBP 300,000 and GBP 500,000 stamp duty thresholds.
- Work out the deposit for 5 and 10 percent and decide which is realistic for you.
- Open a Lifetime ISA now if a first home is the goal and you are eligible, so the bonus and the timing clock both start working for you.
- Get a mortgage in principle before you view, so your offer is taken seriously.
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Get the First Time Buyers Playbook, GBP 6.99Frequently asked questions
Do first-time buyers pay stamp duty in the UK?
Not on a home up to GBP 300,000 in England and Northern Ireland. You pay 5 percent on the part between GBP 300,001 and GBP 500,000, and standard rates with no relief above GBP 500,000.
How much is the Lifetime ISA bonus?
25 percent on up to GBP 4,000 saved a year, so up to GBP 1,000 a year, usable on a first home up to GBP 450,000.
How big a deposit do I need?
Usually at least 5 to 10 percent. A larger deposit typically means a better mortgage rate.