First Time Home Buyer – UK Schemes and Stamp Duty Guide 2025

Buying your first home in the UK in 2025 involves navigating a changed landscape. Stamp duty relief for first-time buyers was reduced from April 2025, the Help to Buy scheme has been replaced by First Homes, and interest rates remain higher than the historic lows of recent years. This guide covers the four essential areas: stamp duty, government schemes, mortgage and deposit requirements, and the step-by-step process.

Whether you are looking in England, Scotland, or Northern Ireland, the rules differ. Scotland uses its own tax system and support programs. Understanding what applies to your situation is the first step toward making an informed purchase.

Do First Time Buyers Pay Stamp Duty in the UK?

Element	Details
Stamp Duty Relief	Up to £300k property = £0 stamp duty (England, from 1 April 2025). Previously £425k.
First Homes Scheme	30-50% discount on new-build homes in England. Must be main residence.
Minimum Deposit	5-10% of property price typically required. Some schemes accept 5%.
Scotland Schemes	LIFT, First Home Fund, Shared Ownership (New Supply) — different rules than England.

First-time buyers in England are exempt from stamp duty on properties up to £300,000 as of 1 April 2025 — this is the single biggest saving available.
The First Homes scheme is the primary government scheme replacing Help to Buy, offering 30-50% discounts on new-build homes.
There is no direct ‘government grant’ cash payment for home buyers in the UK — most support comes via discounts, equity loans, or tax relief.
Scotland has its own system: Land and Buildings Transaction Tax (LBTT) relief up to £175,000 and separate affordable home ownership schemes (LIFT, First Home Fund).
Most first-time buyers in 2025 will need a 5-10% deposit and a mortgage of 4-4.5x their household income.

Key Fact	Value
Stamp Duty Threshold (England, from April 2025)	First £300,000 = £0, then 5% on portion up to £500,000
LBTT Threshold (Scotland)	First £175,000 = £0, then rates apply
First Homes Discount	30-50% off market value (new-build, England)
Typical Deposit Range	5% – 15% of purchase price
Maximum Mortgage Multiple	4 – 4.5x annual household income
Scheme Eligibility	Must be first-time buyer, UK resident, home must be main residence

What Government Grants and Schemes Are Available for First Time Home Buyers in the UK?

There is no direct cash grant for first-time buyers in the UK. Instead, support comes through discounted home ownership schemes, tax relief, and equity loans. The main options in England are the First Homes scheme, Shared Ownership, and the Lifetime ISA. Scotland offers its own set of programs.

First Homes Scheme

The First Homes scheme provides a discount of 30% to 50% on new-build homes in England. Eligibility requires being a first-time buyer aged 18 or over, and the home must be your main residence. You must be able to secure a mortgage for at least half of the discounted purchase price. Income caps apply: £80,000 outside London and £90,000 in London. The discount is passed on to future buyers when you sell.

Key requirement

First Homes buyers are required to fund at least 50% of the price after discount by a repayment mortgage together with a deposit, according to developer guidance from Barratt Homes.

Shared Ownership

Shared Ownership lets you buy a share of a property (typically 25% to 75%) and pay rent on the remaining share. You can increase your ownership over time through a process called staircasing. This scheme is available across England and is often suited to buyers with smaller deposits.

Lifetime ISA (LISA)

You can save up to £4,000 per year into a Lifetime ISA, and the government adds a 25% bonus of up to £1,000 per year. The money can be used toward your first home purchase, subject to the scheme rules. The LISA is available to UK residents aged 18 to 39.

Scotland: LIFT, First Home Fund, and Shared Equity

Scotland has its own suite of schemes. The Low-cost Initiative for First Time Buyers (LIFT) includes shared equity and shared ownership options. The First Home Fund (subject to availability) provides up to £25,000 towards a home. Open Market Shared Equity (OMSE) and New Supply Shared Equity (NSSE) allow the government to provide up to 40% of the property cost, with the buyer covering the remaining share and mortgage.

Regional difference

Scotland does not use stamp duty. Instead, it uses Land and Buildings Transaction Tax (LBTT). First-time buyers in Scotland may pay no LBTT on properties under £175,000, with relief applying up to certain thresholds.

How Much Deposit Do I Need and What Mortgage Can I Get as a First Time Buyer?

A 5% deposit is often the minimum entry point for many first-time buyer mortgages, especially with the Mortgage Guarantee Scheme which helps buyers secure a mortgage with only a 5% deposit. A 10% deposit is commonly seen as stronger and may give access to better mortgage deals. Saving a larger deposit can improve approval chances, reduce monthly repayments, and open up more products.

How much can I borrow?

Most lenders will offer a mortgage of 4 to 4.5 times your annual household income. For example, if your household income is £50,000, you might borrow between £200,000 and £225,000. Your exact borrowing power depends on your credit history, debts, and monthly spending.

Can I get a mortgage as a self-employed first-time buyer?

Yes, but you will need to provide additional documentation. According to MoneyHelper, self-employed applicants need tax returns and business accounts for the last two or three years. Lenders will assess your average income over that period.

Important

Interest rate projections affect affordability calculations. Fixed vs variable mortgage rates are unpredictable, and budget changes in upcoming UK government announcements may alter stamp duty thresholds or scheme availability beyond 2025.

What Is the Step by Step Process for Buying My First Home in 2025?

The process typically takes 6 to 8 months from start to completion. Here are the main stages:

Check affordability – Review income, debts, and monthly budget. Estimate how much you can borrow and save.
Save a deposit – Aim for at least 5%, though 10% is often better.
Check support schemes – LISA, Shared Ownership, First Homes, Mortgage Guarantee Scheme. In Scotland, OMSE/NSSE and LBTT rules.
Get a mortgage agreement in principle – Helps show estate agents and sellers you’re serious. Gives an initial borrowing estimate.
Start house hunting – Consider location, affordability, commute, and extra costs.
Make an offer – Once accepted, move into the legal and mortgage process.
Apply for the mortgage – Lender assesses income, credit history, and property value.
Hire a solicitor/conveyancer – They handle searches, contracts, and completion.
Arrange a survey – Especially important for older properties or flats.
Exchange contracts and complete – Pay deposit and fees. Move in after completion.

How Long Does the Home Buying Process Take?

Month 1-2: Check credit report, save for deposit, research schemes.
Month 2-3: Get Agreement in Principle (AIP) from lender, speak to mortgage broker.
Month 3-4: Start viewing properties, decide on scheme (First Homes / Shared Ownership / private).
Month 4-5: Make an offer, instruct solicitor/conveyancer, arrange building survey.
Month 5-7: Mortgage application processing, searches, exchange of contracts.
Month 7-8: Completion — collect keys, move in.

What Is Certain and What Remains Uncertain for First Time Buyers in 2025?

Established Information	Information That Remains Unclear
First-time buyers in England do not pay stamp duty on homes up to £300,000 (from 1 April 2025).	Budget changes in upcoming UK government announcements may alter stamp duty thresholds or scheme availability beyond 2025.
First Homes scheme offers a genuine 30% minimum discount on new builds in England.	The availability of specific scheme funding (e.g., First Home Fund in Scotland) varies by council area and can be suspended unexpectedly.
Scotland has separate stamp duty (LBTT) relief up to £175,000.	Interest rate projections affect affordability calculations — fixed vs variable mortgage rates are unpredictable.

Why Is Buying a First Home Different in 2025?

Buying a first home in the UK in 2025 is significantly different from previous years. The Help to Buy equity loan scheme ended in March 2023, replaced by the First Homes scheme. Meanwhile, interest rates have stabilised but remain higher than the historic lows of 2020-2022. Stamp duty relief for first-time buyers was introduced in 2017 and the threshold was temporarily raised to £425,000 in September 2022, then made permanent — but from April 2025 it was reduced to £300,000.

First Homes is now the flagship government scheme in England, while Scotland continues its own suite of programs (LIFT, First Home Fund, Shared Ownership). No direct cash grants exist — all support is through discounts, tax relief, or equity loans.

Where Can I Find Reliable Information on First Time Buyer Schemes?

“If you’re a first-time buyer, you may be able to buy a home for 30% to 50% less than its market value.”

UK Government (GOV.UK)

“You need to show proof of your income, debts and spending. If you are self-employed, you need tax returns and business accounts for the last two or three years.”

MoneyHelper (Money and Pensions Service)

“A guide to buying a first home — start building your deposit, check your credit score, clean up your current account, how much can you borrow?”

HOA.org.uk (Housing Association)

What Should First Time Buyers Do Next?

Start by checking your eligibility for the First Homes scheme on GOV.UK, use a mortgage calculator to estimate your borrowing power, speak to a whole-of-market mortgage broker, get your credit score and fix any errors, and open a Lifetime ISA (LISA) to benefit from the government’s 25% bonus of up to £1,000 per year.

Frequently Asked Questions

First time home buyer UK — where do I start?

Start by checking your credit, saving a 5-10% deposit, and getting a mortgage Agreement in Principle. Then research schemes like First Homes in England or LIFT in Scotland.

First time home buyer Scotland — what schemes exist?

Scotland offers the LIFT (Low-cost Initiative for First Time Buyers), First Home Fund (subject to availability), and New Supply Shared Ownership schemes.

First time buyer stamp duty relief — how does it work?

In England, first-time buyers pay £0 stamp duty on the first £300,000 of a property (from April 2025). In Scotland, LBTT relief applies on the first £175,000. Higher rates apply above these thresholds.

First time buyer mortgage — what is needed?

You need proof of income, bank statements, ID, and a deposit. Self-employed applicants need 2-3 years of tax returns and accounts.

Is there a first time buyer government grant of cash?

No. There is no direct cash grant for home buyers in the UK. Support comes via stamp duty relief, discounted home schemes (First Homes), and equity loans (Help to Buy historically).

First time buyer scheme UK 2025 — which is best?

First Homes offers the largest discount (30-50%) but is limited to new-build homes. Shared Ownership is better for lower deposits. Compare based on your income, location, and property type.