How Much Money Do You Need as a First-Time Buyer in 2026

Buying your first home is exciting, but it can also feel overwhelming when you start adding up the costs. From saving a deposit to covering legal fees, understanding what you need financially will help you plan with confidence and avoid surprises along the way. So, how much money do you really need as a first-time buyer to get onto the property ladder in 2026?

The first and biggest step is the deposit. In most cases, first-time buyers need a minimum deposit of 5% of the property value. For example, if you are buying a home priced at £250,000, a 5% deposit would be £12,500. Many buyers aim for more than this, often around 10 to 20%, as a larger deposit usually unlocks better mortgage rates and a wider choice of lenders. With a higher deposit, lenders see you as lower risk.

In 2024, the average first-time buyer deposit was £61,090, according to Halifax, which worked out at roughly 20% of the purchase price. While this is not a requirement, it shows the level many buyers are aiming for to secure more competitive deals.

Beyond the deposit, there are several other costs you need to budget for. A homebuyer survey typically costs between £400 and £600 or more, depending on the level of detail you choose. Legal fees, including local authority searches, are usually around £2,000. Mortgage arrangement costs can include booking fees of £100 to £200, plus product fees that often exceed £1,000.

It is also important to factor in the cost of furnishing your new home. This is an area where first-time buyers can save significantly. Platforms such as Facebook Marketplace, eBay and Gumtree are popular for sourcing affordable furniture and household items, helping you spread costs and stay within budget.

What are first-time buyers entitled to in 2026?

Successive governments have recognised the importance of first-time buyers to the housing market and the wider economy. As a result, a range of government schemes and mortgage products are available in 2026, although the landscape continues to evolve.

Low-deposit mortgages remain widely available, with 5 to 10% deposit products at their highest level in almost 20 years. While these mortgages usually come with higher interest rates to reflect the increased risk for lenders, they significantly reduce the upfront savings needed. Some lenders have gone even further, with Santander launching a 2% deposit mortgage designed specifically to help first-time buyers onto the ladder.

Another key benefit is the Lifetime ISA, often referred to as a LISA. This government-backed scheme is available to those aged 18 to 39 and allows you to save up to £4,000 per tax year. The government then adds a 25 percent bonus, up to £1,000 annually. When used towards a first home, this bonus can make a meaningful difference to your deposit.

Stamp Duty Land Tax is a one-off payment made to the government after you complete on a property purchase. It must be paid within 14 days of completion and the amount depends on the price of the property and your buyer status.

For first-time buyers in 2026, stamp duty relief still applies. If you are buying your first home for £300,000 or less, you do not pay any stamp duty at all. This can represent a significant saving compared to other buyers.

If the property price exceeds £300,000, first-time buyers pay stamp duty at a rate of 5 percent on the portion above £300,001. This structure is designed to reduce the upfront costs of buying and make home ownership more accessible.

The salary you need to buy a £200,000 home depends largely on how much a lender is willing to offer you as a mortgage. Most UK lenders typically lend between four and four and a half times your annual income. In some cases, particularly for higher earners or buyers with strong financial profiles, this can increase to five or even six times income.

As a general guide, a salary of around £40,000 could be enough to secure a £200,000 mortgage if a lender is willing to offer a five times income multiple. More commonly, buyers earning between £44,000 and £50,000 are able to borrow £200,000 at a four to four and a half times income multiple. This can be a combined household salary if you are moving in with your partner.

It is important to remember that salary is not the only factor lenders consider. Existing debts, credit history, monthly outgoings and the size of your deposit all play a role in determining how much you can borrow and on what terms. Speaking to a mortgage adviser early on can help you understand your options and plan realistically for your first purchase.