Buying your first home in London is a big deal. It can feel overwhelming — between saving for a deposit, understanding mortgage rates, and trying to keep up with one of the most competitive property markets in the world. But here's the good news: 2026 is shaping up to be one of the more accessible years for first-time buyers in recent memory, and with the right guidance, getting on the ladder is very much achievable.
In this guide, we'll walk you through everything you need to know — from what's happening with rates right now, to exactly how to apply for your first mortgage in London.
As a first-time buyer in London, you won't pay stamp duty on properties up to £300,000 (provided the property costs £500,000 or less). That's a significant saving worth keeping in mind as you budget.
What's Happening with Mortgage Rates in 2026?
If you've been putting off buying because of high interest rates, you'll be pleased to hear that things are looking better. The Bank of England held its base rate at 3.75% in February 2026, and most forecasts suggest it could fall further — potentially towards 3.25% by the end of the year. That's good news for mortgage affordability.
Even more encouragingly, lender competition is already driving rates down. Best-buy fixed deals have dropped below 4% for borrowers with larger deposits, while typical rates for first-time buyers with a 10% deposit are sitting around 4.3% for a two-year fix and similar for five-year deals.
Note: Following geopolitical developments in mid-March 2026, UK fixed mortgage rates rose sharply. The figures above reflect the pre-March position. Speak to us for the latest available rates — the market is moving quickly and a broker will secure the best current deal for your situation.
The gap between average rates and the best available deals is still wide — which is exactly why using a whole-of-market broker matters so much. The difference between an average rate and a best-buy deal could save you hundreds of pounds every month.
The London First-Time Buyer Challenge
Let's be honest — London is expensive. Average property prices in the capital are far above the national average, which means you'll typically need a larger deposit and a higher income to qualify for a mortgage here than elsewhere in the UK.
That said, there are a few things working in your favour right now:
- High-LTV lending is back. In January 2026, 24% of first-time buyers took mortgages at 90% loan-to-value or above — the highest proportion since 2008. So a 10% deposit is entirely workable.
- Real wages are rising. Earnings grew 4.2% in late 2025 while inflation sat at 3.0% — meaning your buying power is gradually improving.
- Lenders are competing for your business. More products, lower rates, and more flexible criteria for first-time buyers than we've seen in years.
How Much Can You Borrow?
Most lenders will typically lend around 5 times your annual income, with some lenders now potentially lending up to 6 times income depending on your circumstances, credit profile, and deposit size. As a rough guide:
- Single income of £50,000 → borrow approximately £250,000–£300,000
- Joint income of £80,000 → borrow approximately £400,000–£480,000
- Joint income of £100,000 → borrow approximately £500,000–£600,000
The average London property price is around £500,000+. For most first-time buyers, this means either buying in an outer London borough, using a Lifetime ISA to boost your deposit, or buying jointly with a partner. A good broker will help you understand exactly what's achievable for your situation.
What Deposit Do You Need?
The minimum deposit for most mortgages is 5%, though a 10% deposit will open up significantly better rates and more lender options. The bigger your deposit, the lower your interest rate — so if you can stretch to 15% or 20%, it's usually worth it in the long run.
If you're saving for a deposit, make sure you're using a Lifetime ISA (LISA) — the government tops up your savings by 25% (up to £1,000 per year) for properties up to £450,000. It's essentially free money.
Step-by-Step: How to Get Your First Mortgage
Check your credit file
Register on the electoral roll, pay down any outstanding debts, and check for errors on your credit report. Lenders look at this carefully — it's worth spending a month or two tidying it up before applying.
Work out your budget
Factor in your deposit, stamp duty (if applicable), solicitor fees (typically £1,500–£3,000), survey costs, and moving costs. Don't just think about the deposit — buying a home has several upfront costs.
Speak to a mortgage broker
Before you start viewing properties, speak to a broker. They'll tell you exactly what you can borrow, which lenders suit your circumstances, and give you a realistic picture of your monthly payments.
Get a Decision in Principle (DIP)
A DIP is a conditional agreement from a lender showing how much they'd be willing to lend. Estate agents in London will often ask for this before they'll take you seriously as a buyer — so get one early.
Find your property and make an offer
Once you have your DIP, you're in a strong position to offer. In London's competitive market, being mortgage-ready is a genuine advantage.
Submit your full mortgage application
Your broker will package and submit your full application to the most suitable lender — including all the documents needed to support it.
Mortgage offer & completion
Once approved, you'll receive a formal mortgage offer. Your solicitor handles the legal side, and on completion day — the keys are yours.
How AJM Financial Can Help London First-Time Buyers
As a whole-of-market London mortgage broker with over 15 years' experience, we've helped hundreds of first-time buyers get on the ladder — including people who thought they couldn't. Whether you're self-employed, have a small deposit, an unusual income structure, or you've been declined elsewhere, we'll find the right lender for your situation.
Here's what working with us looks like:
- A free, no-obligation initial consultation — by phone, video, or email
- We search the entire mortgage market, including lenders not on comparison sites
- One dedicated advisor who'll be with you from first call to completion
- We don't charge a broker fee in most cases
- Available around the clock — no call centres, no queues
Book a free, no-obligation consultation with AJM Financial today. We'll tell you exactly what you can borrow, which deals you qualify for, and how to make your first London home purchase as smooth as possible. Call us on 0203 137 5213 or book online here.
Your home may be repossessed if you do not keep up repayments on your mortgage. AJM Financial Limited is an Appointed Representative of Stonebridge Mortgage Solutions Ltd, which is authorised and regulated by the Financial Conduct Authority. Registered in England & Wales No. 11333894. Rate information is for illustrative purposes and subject to change — speak to an adviser for current, personalised rates.
