First Time Buyers Guide

A Guide to Buying Your First Home in Birmingham

Buying your first home is an exciting yet overwhelming process. From stamp duty to deposits, here’s some practical mortgage advice for first-time buyers in Birmingham.

For many, taking out a mortgage and buying a property is an intimidating prospect. With so many legalities and factors to consider, the joy of getting onto the property ladder can soon turn into a stressful experience.

So much so that 19% of respondents in Money Supermarket’s survey said they were concerned about buying a house, and 43% of the population claimed they’re more likely to save for a holiday than a home.

However, buying your first home in Birmingham doesn’t have to be complicated, especially when you take advice from a leading local mortgage advisor and broker. 

In this handy first-time buyer guide, we’ve answered some of the most frequently asked questions to ensure you feel confident and comfortable enough to start the search process.  


What is a First-Time Buyer?

The definition of a first-time buyer is someone buying a property that hasn’t owned one before. There are other instances where a person will be classed as a first-time buyer. For instance:

  • If you’ve owned a commercial property but never had your own residential property. The first-time buyer label only applies to residential properties. Therefore, if you’ve owned a shop, pub or office, you could still benefit from stamp duty relief. (More on this later.) Although, if your commercial property is defined as a semi-commercial property, you won’t qualify.
  • If you apply for a joint mortgage or you’ve never owned a residential property before. Once again, your stamp duty will be reduced.

You won’t qualify as a first-time buyer if:

  • You, your spouse or your co-owner has previously owned a property (part-time or full-time)
  • You inherited a residential property/were added to the deeds
  • You owned a residential property abroad


Do First-Time Buyers Pay Stamp Duty?

According to, first-time buyers paying £300,000 or less for a residential property in England and Northern Ireland will pay zero Stamp Duty Land Tax (SDLT). 

For first-time buyers looking to pay between £300,000 and £500,000 for a residential property, SDLT rates currently stand at 5% on the amount of the purchase price that exceeds the £300,000 threshold. Nevertheless, this rate is still a reduction of £5,000 compared to the previous SDLT before 22nd November 2017. 

No stamp duty relief is offered to first-time buyers purchasing a property valued at more than £500,000. 
If you qualify for relief, you must fill out an SDLT return. 


Can a First-Time Buyer Buy-to-Let?

Buy-to-let schemes are a popular way of getting your foot on the property ladder and accumulating a bit of extra income to help fund your dream home. 

However, buying a buy-to-let property in Birmingham as a first-time buyer can be quite a challenge. You will need money upfront for a deposit and income to cover your mortgage payments if you have zero rent coming in.

If you’re planning to invest in a buy-to-let property in Birmingham, you must be honest with your mortgage advisor and lender. Otherwise, you could be in breach of the terms and conditions and immediately forced to repay the entirety of your loan.

Generally speaking, mortgage lenders perceive rental properties as higher risk, as most first-time buyers use the money generated from the rent to pay their own mortgage. 

For further advice on this, we recommend speaking to a trusted Birmingham mortgage broker.


What is the Deposit for an Average Home in Birmingham?

The deposit required for first-timer buyers depends on the average housing prices in the local area and what government schemes are on offer.

In Birmingham, the average property price was £274k in Jan 2022. This figure has increased by around 11% (£26.2k) over the last 12 months. Although, most properties (23.8%) were sold in the £150k-£200k price range. 

An average house deposit in Birmingham equates to around 10%-15% of the total property value. So, based on the average Birmingham property price of £274k, a first-time buyer would need to save:

  • £27,400 deposit – 10% 
  • £41,100 deposit – 15% 


Understanding Loan-to-Value (LTV) as a First-time Buyer

When it comes to buying your first property, understanding the loan-to-value (LTV) percentage is important. You can calculate your LTV by dividing the mortgage amount by the property price and multiplying it by 100. 

The lower your loan-to-value, the better rates you’ll probably receive. For context, the average LTV in Birmingham is circa 82%.


Can First-Time Buyers Get a 95% Mortgage? 

Saving up the necessary deposit for the average house price in Birmingham can be problematic. The good news is that 95% loan-to-value (LTV) mortgage/5% mortgage deposit is an option.

Nowadays, first-time buyers have a much bigger range of borrowing options available to them. Since Covid-19, the UK Government has introduced various schemes and specialist products to encourage first-time buyers to get on the property ladder with 5% deposit mortgages, including: 

  • Shared/co-ownership scheme
  • Help to Buy equity loan scheme
  • Guarantor mortgages
  • 95% LTV mortgages


Need a Hand Buying Your First Home in Birmingham?

Birmingham is one of Europe’s biggest cities, with a diverse culture and over one million residents. One of the biggest reasons to move to Birmingham is its vast career opportunities and central location. Interestingly, it’s possible to reach 90% of the UK from Birmingham in under 4 hours.

Another fantastic benefit of buying your first property in Birmingham is the cost of living compared to London. Reports suggest that food and utility costs are around 20% cheaper. 

As a first-time buyer, we recommend speaking to a leading mortgage broker in Birmingham before making any big decisions. At Birmingham Money, we can guide you through the entire process, from securing an agreement in principle and applying for stamp duty relief to finding the best possible mortgage rate for your dream home. Contact us today.

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