In the UK, first-time buyers may be eligible for certain schemes designed to help them get onto the property ladder.
To be classified as a first-time buyer, you must meet a strict set of criteria.
Who qualifies as a first-time buyer?
In the UK, a first-time buyer is a person buying a house for the first time and has never owned a property before.
Let’s explore some of the nuances that need to be considered when determining whether you’re a first-time buyer.
- Previous property ownership – If you currently or have previously owned a property anywhere in the world, you’re not classed as a first-time buyer.
- Commercial property ownership – You may still be classed as a first-time buyer if you own commercial property, provided that property does not include living quarters. However, it’s important to note that each lender has its own criteria and you should check with them.
- Inherited property – If you have inherited a residential property, you’re not classed as a first-time buyer.
- Buy-to-lets and holiday homes – If you own a buy-to-let or a holiday home, you’re not usually eligible for first-time buyer relief because this type of property could in theory be sold to help pay for your where you intend to live. However, as above, it’s important to note that each lender has its own criteria and you should check with them about your eligibility.
- Joint purchases – If you plan to purchase your first home jointly with someone who already owns a property or has owned one in the past, you will not be classed as a first-time buyer. Both people buying the property must meet the criteria of a first-time buyer to be eligible for first-time buyer benefits.
How do you know if you’re a first-time buyer?
To be classed as a first-time buyer, you must meet the criteria outlined above.
If you’re unsure whether you qualify as a first-time buyer, reach out to one of the friendly mortgage advisors here at UKMC.
We’ll take time to understand your situation and offer clear, straightforward advice.
Can I be a first-time buyer again?
No, once you have owned or had a share in a residential property, you cannot qualify as a first-time buyer again, even if that property was abroad.
If you owned a property jointly with a spouse and left, or sold the property after getting divorced, you would not be classed as a first-time buyer if you then wanted to buy a property on your own.
Why does it matter if I’m a first-time buyer?
Determining whether or not you qualify as a first-time buyer is important, as first-time buyers may be able to access benefits to help them get onto the property ladder.
Some of the schemes and reliefs available to eligible first-time buyers include:
- First-Time Buyers’ Relief – First-time buyers may be eligible to receive Stamp Duty Land Tax (SDLT) relief. If you buy a property for less than the threshold where SDLT starts to apply, then there’s no SDLT to pay. Up until March 31 2025, those eligible for FTBR buying a property up to the price of £425,000 aren’t required to pay any stamp duty. Those buying a property that costs between £425,000 and £625,000 must pay stamp duty at a rate of 5%, but only on the amount over £425,000. From April 1 2025, the threshold at which SDLT is due for a first-time buyer is £300,000 when they’re buying a residental property worth £500,000 or less. That means they’ll pay stamp duty at a rate of 5% on the portion between £300,000 and £500,000.* To read more about stamp duty tax relief, read the Government’s guidance here.
- Lifetime ISA – First-time buyers can use a Lifetime ISA to save for their first home. The government adds a 25% bonus to Lifetime ISAs, up to the value of £1,000 a year.
- First Homes Scheme – The First Homes Scheme allows eligible first-time buyers to get a discount of at least 30% off new-build houses.
- Shared Ownership – First-time buyers may be able to use the Shared Ownership scheme to buy a share in a property and pay rent on the remaining share. This scheme aims to make getting on the property ladder more affordable and accessible to a wider audience. Over time, you can increase your ownership by buying more shares.
Unsure which option is right for you?
At UKMC, we help first-time buyers make informed decisions that fit their personal and financial circumstances. For straightforward advice and guidance, contact our friendly team.
*These figures were updated after the Chancellor of the Exchequer presented her Autumn Budget to Parliament on October 30, 2024.
Are you still a first-time buyer if your partner isn’t?
If you want to buy a home with your partner but they already own or have previously owned a residential property, you will not qualify as a first-time buyer if you buy a property together.
To qualify for the benefits available to first-time buyers, both of you must meet the criteria of a first-time buyer if you plan to buy together.
What happens if I lie about being a first-time buyer?
Telling a little white lie in order to falsely claim first-time buyers’ relief, or another incentive designed for first-time buyers, is considered fraud and will have serious consequences.
If you are found out – and it’s best to assume you will be – you’ll be required to pay back anything that you’ve falsely claimed. If it’s believed that you’ve deliberately tried to cheat the system, you could also be hit with a penalty from HMRC and interest on any unpaid tax.
Depending on the severity of the situation, you could even find yourself facing legal action. Needless to say, honesty is the best policy here!
At UKMC, we have helped countless first-time buyers secure a mortgage on their dream home.
We understand that buying your first home can be a daunting process, and we’re here to make it easier.
Whether you need help understanding ‘what is a first-time buyer?’ or advice on which type of mortgage suits your personal circumstances – we’ve got your back!
To arrange a free consultation with one of our experienced mortgage advisors, fill out our contact form, and we’ll be in touch soon.
DISCLAIMER
UK Mortgage Centre Limited is an Appointed Representative of Refresh Mortgage Network Limited.
Refresh Mortgage Network Limited is authorised and regulated by the Financial Conduct Authority. We are entered on the Financial Services Register under firm number 1019794.
As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments. The Financial Conduct Authority does not regulate some forms of buy-to-let mortgages.
The Financial Conduct Authority does not regulate will writing and taxation and trust advice.
You may be charged a fee for your advice. A typical fee is £495, which would be payable when you receive your mortgage offer. Your dedicated advisor will discuss this further on your free initial phone call.
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