First-time buyer & second-time buyer: What you need to know
Fae KettYou and your partner are ready to buy a home together, but there’s a catch. One of you is a first-time buyer, and the other already owns a property. So what does that mean for things like stamp duty, Lifetime ISAs, and how much you can borrow?
The good news? Buying a home together doesn’t need to be complicated, especially when you plan ahead and get specialist advice. In this guide, we’ll walk through exactly what to expect and how to make the most of your situation
In this guide
Key Takeaways
- Definition: A first-time buyer is someone who has never owned a residential property anywhere in the world, including through inheritance or shared ownership.
- Stamp Duty: If one partner is a homeowner, you generally lose first-time buyer stamp duty relief on joint purchases.
- Lifetime ISA (LISA): You can still use your LISA for a home purchase even if your partner is already a homeowner.
- Borrowing Power: Most lenders offer 4-4.5x your combined income, but "professional" mortgages may allow up to 5.5x or 6x.
- Lender vs. HMRC: Some lenders may treat you as a first-time buyer for certain mortgage products if you haven't owned a property in years, but HMRC will still classify you as a second-time buyer for tax purposes.
For more guides and expert advice on your first house purchase, head to our First-Time Buyer Hub.
Find out what you could afford
Complete your mortgage options with Tembo to see how much you could borrow and explore the best options for buying your home together.
What qualifies you as a first-time buyer?
A first-time buyer is someone who has never owned a residential property anywhere in the world, either outright (without mortgage) or jointly with someone else. That includes ownership through inheritance, gifted property, or shared ownership.
Importantly, first-time buyer status is assessed on an individual basis. So if one partner has never owned a home and the other has, only one of them is a first-time buyer, and that affects things like stamp duty relief and eligibility for certain schemes.
So, if you’ve never owned a home, you’re a first-time buyer. ✅
If you’ve owned or inherited a home before, even if you no longer own it, you’re not a first-time buyer. ❌
If you previously owned a home with a partner, sold it, and have since moved in with your family, you’re not a first-time buyer. ❌
How do banks and HMRC know if you’re a first-time buyer?
| Organization | Verification Methods |
|---|---|
Mortgage Lenders | Credit files, Land Registry records, and declarations made when you apply for a mortgage. |
HMRC | National Insurance numbers, Land Registry data, and international tax records. |
Not sure what stamp duty is or how it works? Take a look at our first-time buyers’ guide to stamp duty.
Get expert advice
Tembo’s team of expert mortgage brokers could help you understand the complexities that come along with purchasing a home. Complete your mortgage options and book in to speak with one of our brokers.
Can you be a first-time buyer twice?
In most cases, no. Once you’ve owned a property, you lose your first-time buyer status permanently in the eyes of HMRC.
That said, some mortgage lenders apply their own criteria and may treat you as first-time buyers if you haven’t owned a home for a set number of years. For example, Nationwide’s Helping Hand mortgage classes applicants as first-time buyers if they haven’t had a mortgage in the last three years. This kind of ‘ownership gap’ rule is a recognised approach; some international homebuyer programmes use a similar three-year threshold to determine eligibility.
However, even if your lender considers you a first-time buyer, HMRC will still class you as a second-time buyer if you’ve owned a home before. So while you may access certain first-time buyer benefits from your lender, stamp duty relief won’t apply.
Do both buyers need to be first-time buyers?
No, a first-time buyer and a homeowner can buy a home together, but it can affect the overall cost of your purchase.
You won’t be eligible for first-time buyer stamp duty relief, so if the property costs £125,000 or more, you may have to pay tax on your purchase.
If the existing homeowner is not selling their current property before you complete, the transaction may also attract the higher rates for additional dwellings, currently an extra 5% on top of standard rates (as of October 2024). Selling the previous home first may help you avoid this surcharge, but it’s worth checking the details with a conveyancer or broker.
However, if you or your partner have managed to build equity in the existing property, this may make it easier to afford your next one. You could use the equity as the deposit on your new property, or use some of the money from the sale for fees or stamp duty costs.
It’s often worth getting advice from a mortgage broker to compare your options. They’ll help you work out whether it’s best to buy a property with a joint mortgage or in one buyer’s name. In some cases, it can make sense for the first-time buyer to be the sole owner, and for their partner to be listed as a guarantor instead.
How Does An Income Boost Mortgage Work?
Can you use a Lifetime ISA if your partner already owns a home?
Yes, a Lifetime ISA is linked to you as an individual, rather than the property itself. So you can still use your LISA even if your partner is already a homeowner. They just won’t be able to use their own LISA when buying a property – but they could use it for retirement.
Learn more: Is a Lifetime ISA worth it?
How much can you borrow together?
Most lenders will offer between 4 and 4.5 times your combined annual income. So if you earn £35,000 and your partner earns £30,000, you could borrow between £260,000 and £292,500, depending on the lender and your financial situation.
Lenders will also look at things like your credit history, existing debts, monthly outgoings, and deposit size when working out how much you can borrow.
It may be possible to borrow 5 or even 6 times your income if you have a job that lenders consider ‘professional’. Criteria can vary from one lender to the next, but most will offer bigger mortgages to doctors, nurses, lawyers and accountants, for example. Find out more here.
If your partner has equity from their existing home, this can also go towards your deposit, making it easier to buy a more expensive property or take out a smaller mortgage.
If you’re struggling to borrow enough, you could explore affordability-boosting options such as:
What is the difference between first-time and second-time buyer mortgages?
The main difference isn’t the mortgage itself; it’s the schemes and benefits you can access. There’s technically no such thing as a ‘first-time buyer mortgage’ or a ‘second-time buyer mortgage’ as separate products. However, first-time buyers are sometimes eligible for specialist schemes and discounts designed to help them get on the ladder.
With the First Homes scheme, for example, you can get a 30% discount on a new build home. This means you’ll be able to buy with a much smaller deposit and mortgage than you usually would. Your monthly repayments will be more manageable too, leaving you with more cash in the bank for bills, furniture, and multiple tins of Farrow & Ball.
Learn more: What are the benefits of being a first-time buyer?
When buying a property together, lenders will look at your combined income, deposit, and existing financial commitments. It doesn’t really matter if one of you is a homeowner and the other one isn’t, as long as you meet the lender’s criteria and can afford the repayments.
Ready to make home happen?
Everyone’s homebuying journey is different. At Tembo, we have a number of tools and a team of experts to help you navigate your journey to homeownership.
