Are you ready to buy? (First-time buyer guide)

Buying your first home is exciting—but it’s also a major financial commitment. It’s not just about whether you can afford the mortgage payments today; it’s about whether you can comfortably manage the costs of buying, and still stay in control if your circumstances change.

This guide helps you pressure-test your readiness by looking at the deposit and the other expenses that often catch first-time buyers by surprise.

Renting vs buying: the decision isn’t always permanent

Many people assume buying is the next step, but there are valid reasons to keep renting for a while longer. Buying is harder to reverse if you change your mind, and it usually involves longer-term costs you can’t simply “switch off”.

If you’re not sure whether now is the right time, it can help to compare:

• Flexibility: renting can be easier to adjust if your job, family plans, or location needs change
• Total cost: buying has upfront costs and ongoing responsibilities (such as insurance and maintenance)
• Long-term commitment: a mortgage term is typically measured in years, not months

If you decide to buy, the key is being prepared for both the immediate costs and the longer-term financial reality.

How much deposit will you need?

A deposit is the portion of the property price you pay yourself, with the mortgage covering the remainder.

In many cases, you’ll need at least 5% of the purchase price to get started. For example, a £200,000 home would typically require a £10,000 deposit.

Note: deposit requirements can vary depending on the mortgage product and your circumstances.

However, the deposit you can manage affects more than just how much you borrow. A larger deposit can:

• improve the range of mortgage options available
• reduce the amount you borrow
• potentially reduce monthly repayments

Where can your deposit come from?

Deposits can come from a mix of sources, such as:

• your own savings
• a gift or loan from family
• a government-backed savings scheme (see below)
• a combination of these

Government help to build your deposit

Some first-time buyers use government-backed savings initiatives to grow their deposit. Two commonly discussed options are the Help to Buy ISA and the Lifetime ISA.

Help to Buy ISA (deposit saving)

The Help to Buy ISA was designed to boost savings for people buying their first home. It offered a government bonus on top of what you saved.

Important note: the Help to Buy ISA is not generally available for new applications in the way it once was. If you’re considering it, check the latest eligibility and availability before planning around it.

Lifetime ISA (deposit saving and retirement)

A Lifetime ISA can be used towards your first home (subject to conditions) or kept for retirement.

Key features include:

• you can open it if you’re over 18 and under 40 when you take it out
• you can pay up to £4,000 per year
• the government adds a 25% bonus, up to £1,000 per year
• you can use the money to buy your first home if you meet the rules

If you don’t use the funds for an eligible purpose, withdrawals can trigger penalties, so it’s important to understand the conditions before committing.

The other costs of buying a home (beyond the deposit)

Even if you’ve saved your deposit, you’re only at the starting line. Buying a property usually involves a sequence of costs—some paid upfront, some due at completion, and some spread across the process.

Below are the main items first-time buyers should budget for.

Mortgage arrangement fees

Some mortgage products include an arrangement fee. A fee can be paid upfront, or in some cases added to the mortgage.

If a fee is added to the loan, you may end up paying interest on it over the mortgage term. That doesn’t automatically make it “wrong”—it’s simply a factor to compare when choosing a mortgage product.

Lender’s valuation

Before the lender agrees the mortgage, they typically carry out a valuation to confirm the property is suitable security.

• it is usually paid upfront
• it can be a fixed cost or vary by lender

Even where a basic valuation is offered, there may still be additional costs depending on the property and the lender’s process.

Independent survey

A lender’s valuation is not the same as an independent survey. If you want a clearer view of the property’s condition, an independent survey can help identify potential issues.

Survey costs vary depending on the type of survey and the property, but it’s common for first-time buyers to budget around £1,000 or more.

Solicitor and conveyancing fees (plus disbursements)

Buying a home involves legal work, including handling contracts and carrying out required searches.

Costs typically include:

• solicitor/conveyancing fees
• disbursements (such as searches and other required payments)

A realistic budget range for many purchases is £500 to £1,000, though it can be higher depending on complexity.

Stamp Duty Land Tax (SDLT)

Stamp Duty Land Tax (SDLT) is payable when you complete the purchase, and the amount depends on the property price and the applicable rules.

A common starting point is that SDLT may apply when the purchase price is above £125,000.

Because SDLT is banded and rules can change, it’s worth checking the current calculation for your specific purchase price.

Moving costs

Moving costs can add up quickly, especially if you need a removal company, storage, or packing help.

Many first-time buyers budget roughly £500 to £1,000, depending on distance and the amount of stuff being moved.

Home insurance

Most lenders require buildings insurance. Many buyers also choose contents insurance, either separately or as a combined policy.

Insurance costs vary by property and coverage level, but it’s sensible to factor this into your monthly outgoings from day one.

Reservation fees for new-builds

If you’re buying a new-build property, developers may ask for a reservation fee to secure the property off the market.

This is often non-refundable if the purchase doesn’t proceed, and it’s usually separate from your mortgage deposit.

A simple readiness check

Before you commit, it helps to confirm you can cover the full buying picture—not just the deposit.

Consider whether you can:

• fund the deposit comfortably (including any scheme-related requirements)
• cover upfront costs such as valuation, survey, and legal fees
• pay completion costs such as SDLT
• manage moving and immediate setup costs
• keep a buffer for unexpected expenses

Buying is a process, and readiness is about having a plan for each stage.

Final thoughts

Being ready to buy isn’t only about affordability—it’s about preparation. When you understand the deposit and the full list of costs, you’re more likely to feel confident through the process and better placed to manage the long-term commitment of homeownership.