First-time buyer in 2025: changes, challenges & solutions

Much is made of the first-time buyer as a group when it comes to discussing the perils and idiosyncrasies of the housing market. The reason for this is because those who are already on the rungs of the property ladder generally have an easier time stepping further up, while that initial impetus to get onto it for first-time buyers is far more difficult.

This comprehensive guide covers everything first-time buyers need to know in today's property market, including the recent Stamp Duty changes, financial assistance schemes, and expert conveyancing guidance.

It's worth defining what is meant by a first-time buyer. A first-time buyer is someone who has never owned property in the UK (or abroad as this may have an impact on the schemes and mortgage products that might be available) and is looking to buy their first home either on their own - with or without help from the various schemes or with financial assistance - or in conjunction with one or more people as co-owners of the property.

If you have already owned a property and then dropped out - perhaps to rent or to live with parents or any other reason where you aren't named as one of the owners on the property's deeds - and deciding to buy a property once again will not mean that you are categorised as a first-time buyer, although some mortgage lenders, depending on your circumstances, may decide to treat you as such.

The first-time buyer landscape has changed significantly in 2025, with several important developments affecting those looking to get on the property ladder:

• Stamp Duty relief removal - The most significant change is the April 2025 removal of the first-time buyer Stamp Duty relief, lowering the threshold from £425,000 to £300,000. This has added thousands to the cost of purchasing a first home.
• New mortgage products - Lenders have responded with an increased range of low-deposit mortgages at 5-10%, though these come with higher interest rates to offset lender risk.
• Digital conveyancing evolution - The conveyancing process has become increasingly digital, with more first-time buyers expecting online case tracking, e-signatures, and 24/7 access to their purchase documentation.
• Regional price shifts - While major city centers continue to see high prices, there's been growth in "commuter belt" locations as remote work patterns have stabilised in 2025.
• Updated government schemes - With Help to Buy fully wound down, the First Homes Scheme has become the primary government support mechanism for first-time buyers in England.

These changes have created both challenges and opportunities for those entering the property market in 2025. Let's examine how these factors impact today's first-time buyers.

More than 50 years ago, it was quite reasonable to expect a family to be able to afford to buy a property with a mortgage, based on the level of annual earnings of just one family member, which would also provide a reasonable amount of disposable income to afford the things of family life.

Fast forward to the present and the situation is considerably different.

The cost of living is much higher than it used to be with foodstuffs, heating, commuting and so much else competing for whatever is left after paying the bills for the basic living expenses.

This problem is exacerbated by the extraordinary level of house price inflation over the decades - indeed, since 1992, the average house price has risen by 500% - that has outstripped the level of salary or wage increases in the same period.

This becomes a problem because of what the mortgage lenders use to judge how much they can lend, which is based on a multiple of how much you earn annually. In turn, this means that the more expensive homes quickly become out of reach financially. Perhaps it also means that you are priced out of the market before you can even think about stepping on that first rung of the property ladder.

What has made the situation even more problematic for the first-time buyer is the reduction in the ability to save for the required deposit before applying for a mortgage (usually set at 10% of the asking price). First-time buyers who are currently renting have found that the monthly rental payments have also increased significantly, which impacts the ability to store away some of the money to create the desired deposit.

According to the latest government housing market figures, the number of first-time buyers willing to try to get into the property market fell to a 10-year low in 2023, though early 2025 has seen modest recovery as buyers adjust to new market conditions.

There are also growing pressures for the first-time buyer in the shape of the governmental approach to the payment of the Stamp Duty Land Tax (in England) and Land Transaction Tax (in Wales). The stamp duty is essentially a tax that is payable on the purchase of a property that is an incremental percentage dictated by the set thresholds of the agreed sale price of the home.

To assist the first-time buyer, from November 2017, the first-time buyer was granted relief on residential purchases by raising the initial threshold to £425,000, meaning that any home costing less than that threshold level would require no payment. However, as of April 1, 2025, the stamp duty relief for first-time buyers has been removed, reverting to the £300,000 threshold - this has significantly increased the cost of purchasing a home for first-time buyers.

It is for these reasons - and the recognition that the vagaries of the housing market play a crucial role in a healthy economy - that successive governments have provided schemes to help boost the number of first-time buyers successfully purchasing a home.

At the same time, mortgage lenders have come up with various new products to assist the struggling first-time buyer in paying back the monthly repayments necessary to afford the purchase in the first place.

There are so many costs involved in the purchase of a property but the first to overcome is finding the funds for the deposit.

The 'Bank of Mum and Dad'

This oft-used almost hackneyed phrase underlines the increasing reliance on financial help beyond that available from the financial institutions.

The term has been in use for the last few decades but has gained particular traction recently when reporting on the state of the property market.

Simply put, it's the reliance on financial assistance of a family member or even a friend so that the pressures of the costs are significantly reduced.

This allows the first-time buyer to go ahead with the purchase without too much pressure from a faceless mortgage lender.

First-time buyer mortgage products in 2025

As of 2025, the number of low-deposit mortgage deals on the market are at their highest in almost 20 years,as reported by the BBC. This means good news primarily for first-time buyers since you would have less money to find to furnish the 5% to 10% types of mortgage products that are on offer.

However, there is a cautionary note: the risk taken by the lenders on such products is increased because they will have to lend a larger sum overall; therefore, to mitigate this, the lender will apply correspondingly higher interest rates than would be the case on a standard mortgage loan.

Government schemes for first-time buyers

One of the more familiar government schemes for first-time buyers was the "Help to Buy"; however, this is now closed to new applications for the ISA, although existing Help to Buy ISAs can still be used to apply for a Government bonus of 25% of the property's sale price (up to a maximum of £3,000), although this is only until November 2030.

The Government is now running a First Homes Scheme, which is targeted at first-time buyers planning to buy a new-build home (or purchase one that was originally bought under the scheme) at a discounted price.

For Welsh residential purchases, there is also the Help to Buy equity loan scheme, which helps to boost the amount the first-time buyer applicant can add to the deposit to help get a foothold with mortgage lenders.

If you currently rent your home through a Local Authority sanctioned organisation such as a Housing Association, you can buy your property at a discounted price via the Right to Buy scheme.

Shared ownership options

Shared Ownership is a government-backed scheme designed to help first-time buyers who may not be able to afford to buy a home outright.

Through shared ownership, you purchase a share (typically between 25% and 75%) of a property and pay rent on the remaining portion to a housing association or private landlord.

All of these schemes and authority-approved help come with eligibility criteria which must be met before you can successfully purchase the property.

When purchasing your first property, it's important to understand the conveyancing process. This is the legal transfer of home ownership from seller to buyer, involving several important steps:

1. Instructing a conveyancing solicitor - Ideally at the same time as making an offer
2. Property searches - Legal checks on the property and surrounding area
3. Contract review - Examining the draft contract from the seller's solicitor
4. Exchange of contracts - The point at which the sale becomes legally binding
5. Completion - When money is transferred and you receive the keys

First-time buyers often underestimate the importance of having an experienced conveyancing solicitor who understands their specific needs and can explain each step clearly.

The majority of first-time buyers are going to be in their twenties, perhaps early thirties, and, as such, there are different ways that they expect to be managed by the variety of organisations involved in a residential purchase - from mortgage brokers to lenders, from estate agencies to removals firms, from building surveyors to conveyancing solicitors and many more.

Because of the age group and the acceleration in technological change, how first-time buyers want to do business has radically changed from previous generations. Gone are the days of waiting for the so-called "snail mail" to deliver forms to be completed and letters; so, too, has the requirement for face-to-face dealings with those they have employed.

In their place comes the use of technology, with a preference for email and other methods to transfer the critical documents and updates. No longer are they expecting to physically sign agreements and contracts and rather rely on e-Signatures and other methodologies to sanction activities and purchases.

And face-to-face meetings are no longer necessary, with various online applications where the client can talk directly with the service supplier.

A further change is a graduation away from what was once understood as "business hours" and "next working day" or "out of hours". The expectation with the advance of technology and the predominantly younger generation being online and therefore digitally available at all times is that the reciprocal expectation is true, too: the service suppliers need to be available at times of their choosing or at least they want to have access to the critical processes and documents at any time.

It is for this reason that Homeward Legal's solicitors have invested in the latest case management systems, which means that the client can look at any of their documents and monitor the progress of the sale and or purchase. However, if the client wants to work with the solicitor, too, can be agreed at the outset so that expectations of communication method and frequency can be managed from the outset.

Are you a first-time buyer looking to embark on the first rung of the property ladder? With the recent Stamp Duty changes since April 2025, it's more critical than ever to understand your options and manage costs effectively.

Whatever your plans, you'll want a focused and experienced conveyancing solicitor to work on the legal aspects.

Look no further than Homeward Legal.

The experts at Homeward Legal will talk you through each stage of the process so that you know what is happening at any point and why and what your role is. They are well-versed in all aspects of the conveyancing process, providing a quality conveyancing service at a fee that is great value for money!

Call to discuss your plans and concerns to purchase your first home. You can also run a quick quote online and our friendly team will come back to you.