Buying a first home in the UK in 2026 is the most challenging it has been in decades. House price-to-income ratios have reached record levels in many areas, and mortgage rates — while down from 2023 peaks — remain significantly above the ultra-low era of 2010-2021.
The numbers in 2026
The Lifetime ISA: the first-time buyer's best tool
Open a LISA between 18-39, save up to £4,000/year, and the government adds 25% (up to £1,000/year free money). After a minimum 12-month holding period, use it for a first home purchase on a property up to £450,000. A couple, both with LISAs, could accumulate up to £8,000 in free government bonuses per year.
Mortgage options for first-time buyers
| Product | Deposit needed | Key consideration |
|---|---|---|
| Standard residential mortgage | 10-20% | Better rates with larger deposit |
| 95% mortgage (5% deposit) | 5% | Higher rate, LMI may apply, smaller pool of lenders |
| Shared Ownership | 5-10% of share | Buy 10-75% share, pay rent on remainder |
| Guarantor mortgage | 0-5% | Parents guarantee the loan — significant risk to them |
Stamp Duty Land Tax (England) for first-time buyers
First-time buyers pay no SDLT on properties up to £425,000 (2026). Above that, 5% on the portion between £425,001–£625,000. Over £625,000, full rates apply (no first-time buyer relief).
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About the author
Enrique 'Kike' Faúndez is an Information Systems and Management Control Engineer from Universidad de Chile, with master’s degrees in Finance from Universidad de Chile and Industrial Engineering from Pontificia Universidad Católica de Chile. He has 15+ years of experience in regulated financial services across finance, operations, and digital product development. He founded CashControlly in Santiago, Chile, with the conviction that personal financial control should not be a privilege, but an accessible and well-designed tool.
- Master's in Finance, Universidad de Chile
- Master's in Industrial Engineering, Pontificia Universidad Católica de Chile
- Information Systems and Management Control Engineer, Universidad de Chile
- AI and ITIL certifications
- 15+ years in regulated financial services
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