First-time buyer? Get £5,000 cashback on your mortgage with this easy tip

From sky-high property prices to chipping away at the deposit fund, getting on the housing ladder in the UK as a first-time buyer is no mean feat.

According to figures from Zoopla, the average property now costs £267,200 nationwide, and is predicted to rise 2.5% by the end of the year.

But there are still ways to get on the property ladder amid skyrocketing costs, from considering the power of shared ownership to making the most of your Help To Buy ISA or Lifetime Individual Savings Account.

There are also mortgage deals that’ll see you given up to £5,000 in cashback for signing, which certainly sweetens the bitter cost of rinsing your savings account.

Looking to get on the property ladder soon? Metro chatted to a property expert about all the perks first-time buyers in the UK can take advantage of.

Remember you’ll be covered by stamp duty land tax relief

This one isn’t something you’ll need to remember to do, as it’ll be applied automatically – but it’s a nifty help to first-time buyers regardless.

Stamp duty is the tax paid when purchasing houses, flats and other land and buildings over a certain threshold. At present, no stamp duty is required on anything worth up to £250,000, and first-time buyers are exempt up to £425,000 – but only until March 31.

‘Stamp duty is a tax paid to the government by homebuyers and, as it stands, first-time buyers are exempt from paying stamp duty on any purchase up to £250,000,’ Lomond CEO, Ed Phillips, tells Metro.

‘However, as of March 2025, this threshold is set to reduce to £125,000. It’s also important to note that should you purchase over £625,000, no first-time buyer relief is afforded and this threshold falls to £500,000 as of March.’

Research from Rightmove finds that more than 70,000 homeowners are set to miss the stamp duty deadline, meaning that home-movers will pay an average of £2,500 more by completing in April instead of March.

Likewise, first-time buyers purchasing properties at £425,000 will need to pay £6,250 in stamp duty fees after the deadline. Tick tock.

Choose a mortgage deal that offers cashback – and don’t rule out shared ownership

Buying your first home doesn’t necessarily mean spending your hard-earned cash on the deposit, mortgage and any new furnishings: some developments will actually pay you to buy.

Take Royal Docks in London for example, where some building associations will offer cash incentives to encourage first-time buyers to move in.

Elsewhere, Aqua Gardens offers a £5,000 cashback of one, two and three-bedroom shared ownership homes – but only if you use their recommended solicitor and broker, and exchange within 28 days.

‘With shared ownership, you can purchase between 10% to 75% of a property and you can increase this share as and when you can afford to, reducing the rent owed in the process,’ Ed adds.

‘This method can be a great way for first-time buyers to get their first foot on the ladder in one form or another. However, it’s important to note that the smaller the deposit you place initially, the more interest you are likely to pay over the lifetime of your mortgage.’

Make use of your Help To Buy ISA

Saving up for a deposit for your first home can place a hefty strain on your finances – and that’s if you’re able to manage it at all.

The Help To Buy ISA was technically abolished in November 2019, but if you successfully applied for one before then, you’ll be able to use any money you’ve put into it to buy your first home until December 2030.

‘The Help to Buy ISA has since been replaced by the Lifetime Individual Savings Account and if utilising it to form a savings pot, you can then use your savings on purchases of homes up to £450,000 – as long as you’re aged 18 to 39,’ Ed explains.

‘You can invest up to £4,000 a year with the government topping up your savings by 25%.’

…as well as the First Home Scheme & Deposit Unlock Scheme

The LISA scheme isn’t the only one to take note of, though. There’s also the First Home Scheme, which as Ed explains, ‘supports local first-time buyers and key workers to get a foot on the ladder with discounts of 30% compared to market price.’

Likewise, there are schemes in place to help reduce the initial cost of a deposit (which is relatively hefty, considering that, according to Zoopla, in 2023 the average was £34,500).

As Ed tells us, the Mortgage Guarantee Scheme is ‘aimed at increasing the supply of 5% deposit mortgages for credit-worthy households by supporting lenders through government-backed guarantees on 95% mortgages and is due to run to 30th June 2025.’

Take out a life insurance policy

And finally, when it comes to buying a house for the first time, you’ll need to consider taking out a life insurance policy if you haven’t done so already.

While this isn’t always a legal requirement for getting on the ladder, it might give you (and your partner, if you’re buying as a couple) peace of mind, as well as a sense of financial protection.

As Legal and General point out, some lenders consider having a life insurance policy a ‘precondition’ for qualifying for a mortgage.

‘If you own a property, a mortgage is likely to be the biggest debt you leave behind should the worst happen, so having a policy in place can help give you peace of mind,’ their website reads.

‘If you have children, a partner, or other dependents living with you who rely on you financially, taking out mortgage life insurance could be considered [an] important expenditure.’

This article was originally published on November 4, 2024.

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