8 First Time Home Buyer Benefits
Believe it or not, being a first-time buyer has its advantages.
Last updated on
May 19, 2026 7:27
If you (and, if applicable, the person you’re planning to buy with) can answer ‘no’, to all these questions, congratulations – you’re officially a first-time buyer. If you’re still unsure, read our guide to what counts as a first-time buyer.
Now let’s look at the benefits that status gives you.
1. You don’t have to sell first
If someone owns a home already, they’ll probably have to sell it before they can buy, and there can be all sorts of legal and financial delays in this process. The fact that first-time buyers aren’t tied to an existing property can be really attractive to sellers on a deadline. You might even hit the jackpot and find a seller who’ll accept a lower offer to make a quick sale.
A quick caveat here: not all of the schemes we’ve listed below are available in all parts of the UK and you’ll have to choose a scheme where you meet the eligibility criteria.
Here, you buy a percentage of a house or flat (between 25% and 75%, depending on how much you have for a deposit), and your local council or a housing association buys the rest.
Under part or shared-ownership schemes, you have to pay your mortgage on the part of the property you own and pay rent on the part that you don’t own. But because your deposit may represent a larger percentage of the mortgage you take out, which can sometimes mean a lower interest rate. However, you’ll also pay rent on the portion you don’t own, so it’s important to consider the total monthly cost.
Over time, you’ll also have the chance to buy more shares of the property, which will bring your rent down further. This is called ‘staircasing’ which means gradually buying a bigger share of your home over time., and you can keep buying shares until you own 100% of your home.
Currently, there is just the Homebuy - Wales scheme, which is just for first-time buyers in Wales, who can get a 20% equity loan from the government when buying a new build property as long as they have a deposit of at least 5% and can get a mortgage for the other 75%.
The First Homes scheme was launched in 2021 as part of government plans to make sure that more of the new homes being built in the UK were affordable. It’s available only in England.
With this scheme, you get a discount of at least 30% on the market value of a new build home which is worth £250,000 or less (rising to £420,000 or less in London), as long as you can tick a few boxes:
In a Rent to Buy tenancy, you sign up to live in a property and pay a reduced rate of rent (usually about 20% less) for a fixed amount of time (usually five years). You’re expected to save up the extra money to use as a deposit to buy the property at the end of your tenancy.
The scheme is available in England outside London; London has its own scheme, called London Living Rent.
While you’re researching these schemes, it’s also worth finding out if your local authority prioritises certain groups. In Scotland, for example, people on a low income, people with disabilities, some single-parent families, older people, and people who have been in the armed forces may have priority for shared ownership first homes.
Another first-time buyer benefit is that you’ll probably owe much less to the taxman.
Stamp Duty Land Tax (better known as “stamp duty”) is a tax you pay when you buy a house or flat in England or Northern Ireland, on top of the amount you pay for the property itself. But before you panic, remember that it’s not a flat rate for everybody.
If you’re not a first-time buyer, you have to pay stamp duty on the part of your property that’s worth over £125,000. But, if this is your first step on the housing ladder, you don’t have to pay stamp duty on anything up to £300,000.
(Based on current HMRC stamp duty thresholds. These may change.)
So, if you were to buy a home for £320,000 as a first-time buyer, you’d have to pay 5% tax on £20,000 – a total of £1,000.
If you were to buy the same home as someone who already has a property, you’d pay 2% on the portion between £125,000 and £250,000 (£2,500) and then 5% on the portion above £250,000 (£3,500) – a total tax bill of £6,000.
Although the rates of Land and Buildings Transaction Tax (the Scottish equivalent of stamp duty) are slightly different, they still kick in at a higher threshold for first-time buyers than for someone selling their home. Wales has Land Transaction Tax (LTT) and there’s no special rate for first-time buyers.
If you want to buy a house, you have to have some savings. First-time buyers have an advantage here as well. With a certain kind of savings account, the government will top up the money you put away every year.
You can open a lifetime ISA at any time between the ages of 18 and 39. With a LISA, you can save up to £4,000 every tax year, and the government will add 25%. Potentially, you’re looking at a £1,000 bonus every year until you’re 50. Plus, because it’s an ISA, you won’t have to pay any tax on the interest your savings make, so you should hopefully see your house fund grow faster.
You’re eligible for some great mortgage deals
In July 2025, the government launched a permanent mortgage guarantee scheme called Freedom to Buy. The scheme is designed to help first-time buyers and home movers may be able to buy with a deposit from 5%, depending on the scheme, lender criteria, and your financial circumstances
Under the scheme, the government gives a guarantee to the lender on mortgages where the buyer’s deposit is as small as 5%. This enables lenders to offer mortgages covering 90% to 95% of the home’s value, with less risk for them if the homeowner ends up being unable to make their repayments.
While the mortgage guarantee scheme is technically a benefit for the lender, not the buyer, it means there are more options for first-time buyer mortgages and that this can increase the number of mortgage options available, and in some cases may lead to more competitive rates
Do first-time buyers get a better rate?
The mortgage rate you get as a first-time buyer will largely depend on how much you’ve got for your deposit - if you’ve got a deposit that’s 10% of the value of the property, you’ll likely get a better rate than if you’ve just got 5%.
That’s because the lender’s taking on more risk if it’s lending you 95% of the value vs 90% (or less).
But there are perks with certain first-time buyer deals. Some lenders may offer incentives, such as cashback (for example, Nationwide was offering £500 when we checked in August 2025), although these offers can change and are subject to eligibility criteria. and some offer a free valuation or waive certain fees.
The key thing is to use a broker that can access access a wide range of lenders and mortgage deals, to ensure you find the best possible deal for the deposit you have, and what you can afford.
Things to keep in mind
While there are plenty of benefits to being a first-time buyer, it’s important to understand the risks too.
A mortgage is a big commitment, so it’s worth getting advice to understand what’s right for your situation.
Take the next step…
Buying your first home will always be a big step, but there are plenty of options to make it more achievable.
And, if you want an expert in your corner until you get those keys, Habito can help. Our mortgage advisors can answer your questions, point you in the direction of schemes you’re eligible for, and help you find the best deal for your first-time-buyer mortgage.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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Yes! The main benefits are that you’ll pay less stamp duty than other homebuyers, and there are several government schemes designed to help you onto the housing ladder, such as the lifetime ISA. There are also perks that certain lenders offer first-time buyers, such as cashback or free valuations as part of the mortgage deal.
This refers to the more generous tax-free allowance for first-time buyers under the stamp duty rules (or the equivalent in Scotland). Stamp duty is a tax that you pay when you buy a property. In England and Northern Ireland, home-movers don’t pay stamp duty if their property costs less than £125,000. But for first-time buyers, that figure is £300,000.
HMRC can easily check if you’re a first-time buyer by using your national insurance number (which will be on previous stamp duty records), and checking records from the Land Registry, which will show if you’ve previously owned a property.
If you’re buying a home with someone, and one of you isn’t a first-time buyer, you won’t qualify for the special first-time buyer stamp duty rate, unfortunately. To get this “relief”, you both have to be first-time buyers.
Some lenders are more generous with their definition of a first-time buyer. For example, with the Nationwide cashback deal for first-time buyers that we mentioned above, its rules just say you can’t have had a mortgage for the previous three years.
The various government schemes have different rules, so the best way to find out what you could get is to check out our guide on first-time buyers or chat to a mortgage expert.
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