Buying a first home in the UK in 2026 is the most challenging it has been in decades. House price-to-income ratios have reached record levels in many areas, and mortgage rates — while down from 2023 peaks — remain significantly above the ultra-low era of 2010-2021.
The numbers in 2026
The Lifetime ISA: the first-time buyer's best tool
Open a LISA between 18-39, save up to £4,000/year, and the government adds 25% (up to £1,000/year free money). After a minimum 12-month holding period, use it for a first home purchase on a property up to £450,000. A couple, both with LISAs, could accumulate up to £8,000 in free government bonuses per year.
Mortgage options for first-time buyers
| Product | Deposit needed | Key consideration |
|---|---|---|
| Standard residential mortgage | 10-20% | Better rates with larger deposit |
| 95% mortgage (5% deposit) | 5% | Higher rate, LMI may apply, smaller pool of lenders |
| Shared Ownership | 5-10% of share | Buy 10-75% share, pay rent on remainder |
| Guarantor mortgage | 0-5% | Parents guarantee the loan — significant risk to them |
Stamp Duty Land Tax (England) for first-time buyers
First-time buyers pay no SDLT on properties up to £425,000 (2026). Above that, 5% on the portion between £425,001–£625,000. Over £625,000, full rates apply (no first-time buyer relief).
Track your budget in pounds
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