First time buyer guide: getting on the property ladder in 2025
Moving home can be quite stressful and financially stretching at the best of times without having the additional issue of being a first-time buyer.
Why buying your first home is more challenging
The reason it is more troublesome is that, generally speaking, once you are on the property ladder, it is much easier to buy the next property. This is often larger because of the accrued equity over the time you’ve been in possession of your current home, plus a proven track record of keeping up repayments on the mortgage without defaulting. As a result, mortgage companies are much more amenable to lending you the money because of the proven risk.
For the first-time buyer, particularly on a budget, it is far more difficult. This isn’t helped by the fact that house price inflation is rising at a faster pace than income for first-time buyers, which puts increasing numbers of properties out of reach of prospective first home owners. Not only is the required deposit growing with rising house prices, but also the amount you can borrow has diminished in comparison, with a larger group chasing a dwindling pot of house supply.
Government support for first time buyers
New mortgage lending rules
Recent changes in mortgage lending rules offer some help for first-time buyers. Those earning an annual income of £30,000 can now apply for mortgage products designed for the scheme, with lenders able to offer more than the previous 4.5 times the annual income. Nationwide is one of the first lenders offering first-time buyers up to 6 times their annual income.
These products could be very useful in helping first-time buyers get on to that all-important first rung of the property ladder.
Understanding the risks
However, as with all such financial considerations, there are certain risks that need to be considered. The biggest of these is the higher level of risk with the sums involved, so there is a higher likelihood of defaulting on payments and properties being repossessed. To circumvent this, you should seek financial guidance from a mortgage broker or other expert who understands the products and the market and what is the best fit for your needs.
Housing market impact and considerations
For the Government, the housing market is one of the keenest measures of the health of the general economy – if house prices are ascending (ideally gradually) then the economy at large is on a surer footing. This is because people will only think about buying a new home if they feel financially secure about the future.
From the Government’s point of view, they have an ambitious plan to build more homes; but, if that ambition is not met, it creates further problems in the housing market. The simple economics are that demand is created for a potentially static availability of homes to buy, with market forces then pushing the average house price up further.
Essential tips for first time buyers
Don’t over-stretch yourself – Maintain careful consideration of your financial position and avoid borrowing more than you can comfortably afford.
Do your research – Take time to understand different mortgage products, government schemes, and local property markets before making decisions.
Get professional advice – Work with mortgage brokers and other experts who understand the products and market to find the best fit for your needs.
Budget for additional costs – Remember to factor in conveyancing fees, surveys, moving costs, and ongoing homeownership expenses.
Frequently asked questions about first time buying
What deposit do I need as a first time buyer? Most lenders require a minimum 5-10% deposit, though larger deposits often secure better mortgage rates and terms.
Can I get a mortgage with bad credit as a first time buyer? Some specialist lenders offer mortgages for first-time buyers with poor credit, though rates may be higher and deposit requirements larger.
What government schemes help first time buyers? Current schemes include Help to Buy, Shared Ownership, and the new higher income multiple mortgages for those earning £30,000+.
How much can I borrow for my first mortgage? Traditionally 4.5 times annual income, though new schemes allow up to 6 times income for eligible first-time buyers.
What additional costs should I budget for when buying my first home? Factor in solicitor fees, survey costs, stamp duty (if applicable), moving expenses, and initial home setup costs.
Affordable conveyancing for first time buyers
At Best Value Conveyancing, we appreciate that your funds are probably quite limited as a first-time buyer, so you’ll want legal services that offer great value for money without losing quality.
We provide fixed-price quotes with transparent disbursements and a no completion, no fee guarantee if your purchase falls through.
Call 0800 0387 007 to start your conveyancing process today.
