What Is a First Time Buyer? Full Guide 2025

What is a First Time Buyer

If you’re thinking about buying your first home, you’ve likely heard the phrase “first-time buyer” a lot. It shows up in mortgage ads, government schemes, and estate agent listings, but what does it actually mean, and how does it benefit you?

A first time home buyer, is a person who has never previously bought, purchased, or owns a property, whether in the UK or abroad. If a person has previously bought, purchased, or owns a residential property regardless of whether the property was a house, flat, or other dwelling, they are not considered a first time buyer.

However, ownership of commercial property, such as a shop or office, does not disqualify someone from being a first time buyer unless the property included living quarters. Interests acquired through an alternative finance scheme or via a financial institution acting on behalf of a purchaser are also considered when determining first time buyer status. If a person has previously acquired a major interest in a property, or if others have previously acquired such an interest on their behalf, they will not qualify as a first time buyer.

As a mortgage broker who supports first-time buyers every day, I want to break down exactly what a first-time buyer is, what financial help is available in 2025, and how to take confident, well-informed steps toward owning your first home. The government launched several initiatives, such as Help to Buy, (ended on the 31st October 2022 to new applicants) and the Mortgage Guarantee Scheme, to support first time buyers.

Introduction to Buying a Home

Buying a home is one of the most significant milestones for first time buyers, marking the start of your journey up the property ladder. As a first time buyer, understanding the process and the unique financial benefits available to you is crucial.

The government has launched several initiatives, such as the Help to Buy scheme (ended 31st October 2022) and the Lifetime ISA, specifically designed to help first time buyers save money and make homeownership more accessible. These schemes can provide valuable financial benefits, including stamp duty relief, making it easier to purchase your first property.

To qualify as a first time buyer, you must not have previously owned a major interest in a dwelling or an equivalent interest in land situated anywhere in the world. This includes previous acquisitions through inheritance, gifts, or alternative finance schemes.

Who Qualifies as a First-Time Buyer?

A first-time buyer is someone who:

• Has never owned a property anywhere in the world

• Is buying a home to live in as their main residence

• If the property is purchased jointly, all buyers must be first-time buyers, if any purchaser has previously owned property, the group will not qualify for first-time buyer relief and may have to pay stamp duty

When applying for a mortgage with a partner, lenders will consider your joint income to determine how much you can borrow.

Even if you’ve never physically lived in a property (say, if you inherited it and sold it), you won’t be classed as a first-time buyer. The rules are strict because the benefits available are valuable.

Why First-Time Buyer Status Matters in 2025

In 2025, being a first-time buyer unlocks powerful financial advantages that can make all the difference when entering the property market. These include tax exemptions, low-deposit mortgages, and exclusive schemes that reduce your costs and expand your options. Additionally, first-time buyers often have a lead over other buyers because they are not part of a property chain, making their offers more attractive to sellers.

1. Stamp Duty Relief

You won’t pay any Stamp Duty on homes costing up to £425,000. For properties priced between £425,001 and £625,000, you’ll only pay 5% on the portion above the threshold.

This can save you up to £11,250 money better spent on your deposit, furnishing, or renovations.

2. Access to Low-Deposit Mortgages

Lenders across the market are now offering 95% loan-to-value (LTV) mortgages, which only require a 5% deposit. Some lenders even go further, offering 100% mortgages for renters who can show at least 12 months of consistent rental payments. Mortgage lenders are increasingly providing innovative products to help first-time buyers with limited deposits.

3. Government-Backed Schemes

There are several schemes available for first-time buyers in 2025:

• Mortgage Guarantee Scheme: Backed by the government, allowing you to access 95% mortgages with extra lender security

• First Homes Scheme: Discounted new-build homes for key workers and locals

• Shared Ownership: Purchase a portion of a property and pay rent on the rest

• Deposit Unlock: Buy a new-build home with just a 5% deposit through participating developers

Please note that some government schemes are no longer open to new applicants, but several options remain available for first-time buyers.

Who Offers the Best First-Time Buyer Mortgages?

Choosing Between High-Street and Specialist Lenders

Not all lenders are the same and depending on your income, deposit, and credit history, you may find better support from one over the other. The amount you can borrow will depend on your income, deposit, and the lender’s criteria. The tables below outline which lenders are currently offering the most competitive and accessible mortgages for first-time buyers.

High-Street Lenders (Best for Simpler Cases)

These lenders are best for buyers with steady employment and a clean credit history. If you have a 5–10% deposit and straightforward finances, one of these banks could be ideal.

Specialist Lenders (Best for Complex, Low-Deposit, or Non-Standard Situations)

Specialist lenders are often available only through brokers and offer flexible options if your profile doesn’t fit traditional criteria, ideal for buyers with variable income, previous credit issues, or low savings.

Am I a First-Time Buyer? Clarifying Common Scenarios

• You’ve rented for 10 years but never owned a property = You qualify

• You inherited a flat 5 years ago and sold it = Not a first-time buyer

• You’re buying with a partner who has owned before = Joint application won’t qualify

• You bought a home abroad in the past = Doesn’t count as first-time buyer

• You’re using a Lifetime ISA for your first purchase = Still qualifies

• You have previously purchased or had a property bought in your name, even if not in the UK = Not a first-time buyer

First-time buyers may have an advantage over those who have previously purchased a home, as they are not part of a property chain.

How to Prepare for Your First Mortgage

To get the best deal, preparation is key. Whether you are buying a house, flat, or another type of property, being well-prepared will help you throughout the process. Here’s what lenders want to see from you:

1. Income & Employment

• Employed? Bring payslips (3–6 months), bank statements, and a P60

• Self-employed or freelance? Show 1–2 years of accounts or tax returns

2. Credit Score & History

Check your credit score, correct any errors, and avoid taking on new debt before applying. Lenders prefer to see stability, no missed payments and no recent credit defaults.

3. Deposit & Budget

Even a 5% deposit can open the door to a mortgage, but a larger deposit (10–15%) can lower your interest rate and monthly payments. Budget for legal fees, surveys, insurance, and Stamp Duty (if applicable).

The Step-by-Step Buying Process

1. Check your affordability with a mortgage broker

2. Get a Mortgage in Principle (MIP) to strengthen offers

3. Search for a property within your budget. As a first-time buyer, you do not need to sell an existing home before you buy property, making the process faster and more straightforward.

4. Make an offer and apply for your mortgage

5. Undergo valuation, legal checks, and exchange contracts

6. Complete and collect your keys you’re a homeowner!

Owning a Home: What to Expect After You Buy

Once you’ve completed your property purchase and become a homeowner, a new chapter begins one filled with both responsibilities and rewards. As a first time buyer, you’ll now be responsible for maintaining your property, making regular mortgage payments, and managing your household finances.

While these new duties may seem daunting, they come with significant advantages. Owning your first home can be a smart long-term investment, offering the potential for your property’s value to grow over time. You’ll also enjoy the freedom to personalise your living space and truly make it your own.

First time buyers continue to benefit from government support even after the purchase, such as ongoing stamp duty relief and access to helpful schemes. Navigating the housing market can be complex, so it’s wise to work with a reputable lender and seek advice from a financial expert to ensure you make the most of your new status.

Understanding the criteria for first time buyers and your buyer status will help you make informed decisions, maximize the advantages available, and set yourself up for a successful future as a homeowner.

Final Thoughts: First-Time Buyer in 2025

Being a first-time buyer in 2025 offers some of the most significant financial advantages in the market:

• Zero or reduced Stamp Duty

• Government-backed 95% mortgages

• Tailored lender products for all buyer types

• Flexible lending criteria if you’re not a “perfect” case

But while your status unlocks better options, success still depends on preparation, realistic budgeting, and working with a knowledgeable mortgage broker who can find the right lender for your situation. Partnering with an award winning team of mortgage advisors can further help first-time buyers navigate the process and secure the best deals.

Get help from an experienced mortgage broker.

You can speak to one of our specialist mortgage brokers who would be able to guide you through the process. They will advise if there is a lender available and the maximum loan amount based on your circumstances. We are a whole of market mortgage brokerage with access to all lenders. Call us on 01332 470400 or complete the form with your details for us to give you a call back.

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