The UK first-time buyer route map (LISA, mortgage, stamp duty — in order)

Buying a first home in the UK isn't one decision — it's a sequence of about a dozen smaller ones, made over months or years. This is a route map of the main checkpoints, in roughly the order they tend to land, with the figures HMRC and gov.uk publish for each.

It's an overview, not advice. Mortgages and conveyancing involve regulated professionals — speak to one before signing anything.

Step 1 — Decide whether the Lifetime ISA fits

The Lifetime ISA (LISA) is the only adult ISA wrapper that pays a government bonus. Pay in up to £4,000 per tax year and the state adds 25% — up to £1,000 per year, on top of the interest or investment growth.

It comes with three constraints that disqualify some buyers immediately:

1. You must be aged 18–39 to open one. You can keep paying in until 50.
2. The home you buy with it must cost £450,000 or less. This cap has not moved since the LISA launched in 2017 and is increasingly tight in London and parts of the South East.
3. The account must have been open for at least 12 months before you use it to buy.

Use the money for anything other than a first home or retirement (after 60) and the penalty is 25% of the amount withdrawn — which, because of how the maths works, is actually a small loss on your own contribution, not just a clawback of the bonus.

A LISA can be cash-based (lower-risk, modest interest) or invested in funds (higher-risk, higher-potential-return). Most people saving over a 3–10 year horizon use cash; longer-horizon savers split.

HMRC Lifetime ISA guidance →

Step 2 — Build the deposit

Lenders typically want a deposit of 5%–25% of the purchase price. The mortgage rate you'll be offered is sensitive to loan-to-value (LTV) — the lower the LTV, the better the rate, with the cliff edges falling at 95%, 90%, 85%, 80%, 75% and 60% LTV. A 10% deposit and a 15% deposit often land in noticeably different rate bands.

Sources of deposit, in rough order of how lenders handle them:

• Your own savings (ISA, current account, premium bonds, NS&I). Easiest — lender just sees the funds and where they came from.
• Lifetime ISA proceeds. Treated as your own deposit. The conveyancer requests the funds directly from the provider when contracts are exchanging.
• A gift from a family member. Most lenders accept this, but require a signed "gifted deposit letter" confirming there's no repayment expected.
• Equity loans (Help to Buy, shared equity from a developer). Treated separately — these reduce the mortgage you need but add a different debt to the picture.

What lenders are wary of: deposits that appear in your account close to application. They like to see a savings history. Drip-feeding from monthly salary for 6–12 months before applying makes the picture cleaner.

Step 3 — Understand what you can borrow

Most mainstream UK lenders cap mortgage borrowing at around 4 to 4.5× gross annual income. A small number stretch further for higher earners or specific products — Halifax, Nationwide, Skipton and some others offer up to 5.5× for selected customers; "Track Record" and similar schemes can go further still for renters with payment histories.

A few mechanics worth knowing:

• Joint applications add the second income to the calculation, but lenders look at total affordability, not 4.5× the sum unconditionally.
• Monthly debt payments reduce borrowing power. Loans, car finance and credit card balances each chip away — a common heuristic is that every £100/month of debt subtracts around £3,000 from the maximum mortgage.
• Lenders stress-test against a higher rate. They model what your payments would be at the reversion rate plus a margin (typically a stressed rate of 7–9%). If you'd struggle at that stressed payment, they decline.

Our mortgage affordability calculator walks through this with editable inputs.

Step 4 — Plan for stamp duty (or its devolved cousins)

The property tax payable on completion depends on where the property is:

• England and Northern Ireland — SDLT. First-time buyer relief: 0% on the first £300,000, 5% on the slice from £300,001 to £500,000. No relief at all if the property costs over £500,000. Standard rates apply otherwise: 0% to £125k, 2% to £250k, 5% to £925k, then 10% and 12% on the upper bands.

• Scotland — LBTT (Land and Buildings Transaction Tax). First-time buyer relief raises the 0% threshold from £145,000 to £175,000. Standard bands continue above that: 2% to £250k, 5% to £325k, 10% to £750k, 12% above.

• Wales — LTT (Land Transaction Tax). No separate first-time buyer relief — the £225,000 standard 0% threshold applies to everyone. Bands above: 6% to £400k, 7.5% to £750k, 10% to £1.5m, 12% above.

Stamp duty is paid on completion, not application. The conveyancer files the return and remits it to HMRC (or Revenue Scotland / WRA) on your behalf — usually deducted from completion funds.

Run the numbers on our stamp duty calculator for any specific price.

HMRC stamp duty land tax guidance →

Step 5 — Get an Agreement in Principle (AIP)

Before viewings get serious, most buyers obtain an Agreement in Principle from a lender (sometimes called a "Decision in Principle"). It's a soft credit check and rough income assessment — not a formal offer, but enough to give estate agents and sellers confidence that you can fund the purchase.

AIPs are usually free, last 30–90 days, and don't damage your credit file. Some buyers get them through a broker; others apply directly with a lender.

Step 6 — Offer, solicitor, survey, mortgage offer

Once an offer is accepted, four things happen in parallel:

1. You instruct a solicitor (or licensed conveyancer) — they handle searches, contracts, and the legal transfer of ownership.
2. You commission a survey — the lender's valuation is for them, not for you. A homebuyer's report or building survey is a separate, voluntary spend (typically £400–£1,500 depending on detail).
3. Your formal mortgage application kicks off — paperwork, payslips, bank statements, ID checks, and an underwriter review.
4. You confirm the LISA withdrawal — your conveyancer requests the funds from the provider, which takes around 30 days.

Once the mortgage offer is issued (the binding version, not the AIP), you proceed to exchange and completion.

The traps that catch people late

A few situations that sit outside the obvious path:

• Buying jointly with someone who already owns. If either party owns property anywhere in the world, the purchase usually isn't a first-time-buyer transaction. SDLT relief is lost, and the LISA can't be used (the bonus is forfeited and the 25% penalty applies on withdrawal).

• Buying above the LISA cap. If the purchase price is £450,001 or more, the LISA's withdrawal penalty kicks in — you'd lose 25% of whatever you take out, including your own contributions. Some buyers in this position transfer the LISA to a stocks & shares ISA before completion.

• Buying off-plan with a long completion window. If exchange and completion are more than 12 months apart, the LISA withdrawal rules become awkward — funds can typically only be released within 90 days of completion.

• New-build incentives. Developer cashbacks and "deposit contributions" are sometimes deducted from the purchase price by the lender, which can affect both the loan-to-value calculation and the SDLT band. Always confirm with the conveyancer.

• Buying with a partner where one has poor credit. A joint application uses the worst credit score, not the average. Sometimes one applicant alone gets a better outcome.

The order, condensed

Roughly:

1. Decide on LISA vs other ISA wrappers (years 0–5+ before purchase)
2. Build deposit and savings history (months 6–24 before purchase)
3. Run the maths on borrowing capacity and stamp duty
4. Get an AIP (weeks before house-hunting begins in earnest)
5. Offer accepted
6. Instruct solicitor, commission survey, submit full mortgage application
7. Mortgage offer issued, exchange, then completion
8. Move in, and remember you still pay stamp duty on completion if applicable

Most steps look daunting in isolation and turn out to be lighter than expected in practice. The pieces that surprise people most often are the LISA's £450k cap and the lender's stress-test rate — both worth modelling before settling on a purchase price.

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Last updated 22 May 2026. Figures from HMRC, Revenue Scotland and the Welsh Revenue Authority apply to the 2026/27 tax year unless stated otherwise. Mortgages are regulated by the FCA; speak to a regulated mortgage adviser before applying. This article is educational and is not personal financial advice. See our disclaimer.