First Time Buyers: Finance

The affordability challenges facing prospective first-time buyers mean that too many people are now locked out of homeownership.

In addition to increasing the supply of homes of all tenures, the government is supporting people into home ownership, including through the shared ownership scheme and the Lifetime ISA.

First time buyers also benefit from paying no stamp duty land tax (SDLT) up to £300,000 and are able to claim relief on purchases up to £500,000. The government has also introduced a new, permanent Mortgage Guarantee Scheme, available to support and sustain availability of low deposit mortgage products for prospective buyers.

Additionally, the Bank of England has been easing the loan-to-income limit, enabling up to 36,000 additional first-time buyers in the first year. The Financial Conduct Authority’s (FCA) ongoing review of the mortgage market means many buyers can now borrow 10% more towards a property purchase. The government looks forward to further ambitious proposals from the FCA.

First-time buyers may also benefit from home ownership initiatives offered at the local level.

The government has also made changes to the tax system to reduce demand for housing as an investment opportunity for overseas investors. Non-UK residents already pay a 2% surcharge on top of the residential rates of Stamp Duty Land Tax (SDLT) when purchasing a dwelling in England or Northern Ireland. At the Autumn Budget 2024, the government increased the higher rates of SDLT, which are also paid by non-UK residents purchasing additional property, by two percentage points from 3% above standard rates to 5% above standard rates. Increasing the higher rates of SDLT helps to ensure that those looking to move home, or purchase their first property, have a greater advantage over second home buyers, landlords and companies purchasing residential property.