First-time buyers 2025: latest changes and updates

The first-time buyer market has seen major developments in recent months, with significant new opportunities emerging alongside existing challenges.

We have a comprehensive guide covering all aspects of first-time buying with detailed information on schemes, processes, and costs. This article focuses on the key changes affecting first-time buyers in 2025 and how they impact your homebuying plans.

One of the biggest recent changes that has had a significant impact is the reversion of the stamp duty thresholds at the beginning of April 2025, so that first-time buyers will have to pay more in stamp duty when hitting a certain threshold.

First-time buyers still get some stamp duty relief in comparison to the more seasoned home-mover, though. Where the first threshold had been set at £425,000, this has been reset to £300,000. And where purchases up to £625,000 had been subject to first-time buyer stamp duty relief, this has been lowered to £500,000, which means that no stamp duty benefit will be derived if the home is worth more than this lowered upper limit.

In summary:

• No stamp duty is payable in the first £300,000 of the house's agreed price
• 5% is payable on any sum above that up to £500,000
• Stamp duty is payable for any house priced at over £500,000, at which point the first-time buyer is treated as if you have bought a house before, and you will trigger the lower level of £125,000 and each successive trigger as the property's price rises beyond them

There are a lot of mortgage products out on the market, many with slightly differing terms making the choice almost overwhelming, particularly if you are not familiar with the loans and what they might mean to you.

One of the key problems for you as first-time buyers in today's market is that house price inflation continues to outstrip the rate at which your income rises. Since it is the total income of those applying for the mortgage - separately or jointly - that the lenders are interested in using a multiplier to identify whether you can afford to pay the monthly repayments, it comes as no surprise that the traditional mortgage products are increasingly off-limits because you simply can't meet the criteria.

Fifty years ago, for example, mortgages could be obtained at three times the annual income, with a maximum deposit of 5% of the home's price. To the present day, the number of homes that are available for that kind of money with that deposit are diminishing if not impossible to find.

Nowadays, mortgage companies are trying different options for their products by offering low or zero deposit loans, or a higher multiple of the total annual income. But trying to find the product that fits your needs seems a more difficult task, which is why it might be a good idea to seek out the help of a mortgage adviser who will have all the products and facts to hand to guide you through what is the best option for you.

Major news emerged in July 2025 that the Bank of England has loosened mortgage lending rules, designed to help around 36,000 first-time buyers access the property ladder. Where the limit was tied to a maximum 4.5 times the income that could be borrowed, these have been relaxed.

The Government has rebranded its scheme as Freedom to Buy, and is open to putative first-time buyers who earn more than £30k a year. This is designed to encourage those uncertain first-time buyers to get on to the property ladder. The broader risk is managed by the Government and lenders through a new process via the Treasury, since the relaxation of the terms will increase the risk on borrowers defaulting on their loans.

Nationwide is one of the first lenders out of the traps (16 July) by offering a product that allows lending of six times the first-time buyer's income under its Helping Hand banner. Other lenders are likely to follow suit, so it will pay to shop around to find whichever product best fits your requirements.

While this is good news for those struggling with saving up a deposit and then having to find the money for the monthly repayments, there are increased risks associated with this news - not the least is the increased likelihood of problems further down the line because more money has been lent against a larger price of mortgage.

In many ways, the changes that keep coming to help first-time buyers may seem like a sheer mountain to climb to understand and that might mean that you are stalled in inertia wondering what to do.

Sometimes doing nothing is a valid option, while all this change also means that you don't have to necessarily change what you had been planning on doing. There is always the fabled "Bank of Mum and Dad" where you can borrow part or the full amount of the deposit from a family member or friend (provided the surety for that loan remains intact), and there are also various other options including buying with someone else to boost the total annual income, or you could look into the possibility of buying a sharehold (buying a percentage of a home's price at a lower mortgage rate, and paying rent on the remainder).

And, of course, as highlighted here, it's all good news as far as it goes, but will only be effective if the housing supply is available. If new housing is not built as per the Government's ambitious plan to build 1.5m homes by 2030, this new scheme and relaxation rules may have an opposite effect - more buyers chasing a slower-growing or stagnant housing supply will put upward pressure on housing prices, which in turn will bring us back to the point of unaffordability we were at before the announcement.

Ultimately, the choice is yours as to which way you want to go with buying your first home, but it's worth doing the research and homework on what is affordable in terms of homes and products to fit your needs, but also to identify the help that is available to first-time buyers.

Whether you're considering these new mortgage options or sticking with traditional products, you'll need expert legal support for your first property purchase.

Homeward Legal specialises in first-time buyer conveyancing with transparent fixed pricing and our 'no completion, no fee' guarantee.

Call  or get your instant quote online to secure expert support for your first home purchase.