First-Time Home Buyer Guide Scotland 2026 (Edinburgh & Lothians)

A comprehensive guide to buying your first home in Scotland in 2026. Learn about Home Reports, offers over, LBTT relief, deposit requirements, income multiples, and support schemes like LIFT, Shared Ownership, and Lifetime ISA.

Introduction

Buying your first home in Scotland is exciting – and a bit different from elsewhere in the UK. This friendly guide walks you through the Scottish home-buying process, deposits and mortgages in 2026, and support schemes available to first-time buyers in Edinburgh and the Lothians.

Scotland's unique legal system means the buying process works differently here. From Home Reports to missives, understanding these differences will help you navigate the market with confidence and avoid costly mistakes.

1. How Scotland Differs from England

Home Reports & "Offers Over" Pricing

In Scotland, sellers must provide a Home Report (including a survey, valuation, and energy report) upfront for buyers. Properties are often advertised at an "Offers Over" price – meaning the listed price is a minimum and offers typically come in higher^[1].

In competitive Edinburgh markets, sellers may set a closing date for offers, where multiple buyers submit their best bid by a deadline. This sealed-bid system contrasts with England where offers are negotiated openly.

You'll Need a Solicitor Early

Scottish offers are made formally through a solicitor rather than directly by the buyer. You'll engage a solicitor to note interest in a property and submit a written offer on your behalf. The offer isn't just a price; it includes your desired entry date (move-in date) and any conditions (like securing a mortgage)^[1].

If your offer is accepted, the buyer and seller's solicitors exchange letters (missives) to agree the contract terms.

Binding Sale & No Gazumping

One big difference – once missives are concluded, the deal is legally binding. There's no equivalent of the English "exchange of contracts" delay; in Scotland, it typically becomes binding sooner. This reduces gazumping risk significantly^[2].

After conclusion of missives you might have to pay a holding deposit – typically £500–£1,000 – to secure the deal.

"Offers Over" Means Budgeting Extra

Note that if a home's Home Report valuation is £200k but it sells for £220k, a mortgage will usually only cover up to the £200k valuation. Any amount you offer above the valuation must be paid out of pocket. First-time buyers in Edinburgh often need to save extra funds beyond the basic deposit to cover this gap on sought-after properties^[3].

Land and Buildings Transaction Tax (LBTT)

Scotland has its own property tax instead of Stamp Duty. First-time buyers pay no LBTT on the first £175,000 of a purchase, which saves up to £600. If your first home costs more, you'll pay a tiered percentage only on the portion above £175k. For example, a £210k starter flat would incur about £700 LBTT^[4].

2. Getting Your Finances Ready

Typical Deposit Sizes

The minimum deposit for first-time buyers is usually 5% of the purchase price – many lenders offer 95% loan-to-value mortgages. A UK-wide Mortgage Guarantee scheme now permanently backs 95% loans to encourage low-deposit lending^[5].

In practice, however, most buyers put down a larger deposit if they can. The average first-time buyer deposit in Scotland is around £43,537 (roughly 20-22% of property costs). Don't panic if you can't manage that – it's still possible to get on the ladder with 5-10%, just be prepared for slightly higher interest rates^[5].

Edinburgh Prices and Deposits

In the Edinburgh area, property prices are higher than the Scottish average. Edinburgh's typical first-time buyer home costs around £251,088. That means your deposit in absolute £ terms will be higher too. For example, a 5% deposit on a £250k flat is £12,500^[6].

Many Edinburgh buyers use help from family or extra savings to put down closer to 10-15% (£25–£40k) – not always by choice, but because of the "offers over" factor discussed earlier.

Income Multiples (How Much You Can Borrow)

Lenders determine your maximum mortgage primarily by your income and debts. In 2026, most banks will lend around 3.5 to 4.5 times your annual household income (combined, if buying as a couple). For example, a couple earning £50k might borrow roughly £175k–£225k^[7].

Some lenders now offer higher income multiples for certain first-time buyers – even up to 5.5× or 6× income if you have a strong profile. Barclays introduced a 6× income multiple for eligible first-time buyers, one of the highest loan-to-income ratios currently available.

Get a Mortgage Agreement in Principle (AIP) Early

This is a free estimate from a lender of what you can borrow, based on some basic checks. Having an AIP letter in hand makes you a more confident buyer – and in Scotland, sellers (and their solicitors) will expect you have one when you make an offer. It shows you're "good for the money."

3. First-Time Buyer Support Schemes in 2026

Buying a home is expensive, but there are several schemes and programs to help first-time buyers with costs:

LIFT – Open Market Shared Equity (OMSE)

LIFT stands for Low-cost Initiative for First-Time Buyers, a Scottish Government shared equity program. It's designed to help people on low to moderate incomes buy a property on the open market. You fund a majority of the purchase (at least 60% of the price) and the government funds the rest (up to 40%). You own 100% of the property but share the equity stake with the government^[8].

Priority groups eligible for LIFT funding in 2025/26 include social renters, disabled people, armed forces, and those aged 60+.

New Supply Shared Equity (NSSE)

This is another Scottish shared equity scheme, similar to LIFT but aimed at new-build homes. Under NSSE, you purchase a newly built house or flat (often from a housing association or the council) and the government provides equity support. Typically you can buy 60% to 80% of the new home, and the government holds the rest as an equity stake (no rent on their portion).

Shared Ownership

Not to be confused with shared equity, Shared Ownership means you buy a share of a property (e.g. 25%, 50% or 75%) and pay rent on the remainder. This is usually run by housing associations. Over time you can "staircase" up by buying more shares^[9].

Lifetime ISA (LISA)

If you're under 40, you can open a Lifetime ISA and save up to £4,000 per year; the government adds a 25% bonus on top of your savings, up to £1,000 per year free money. You can use those funds (after at least 12 months of having the account) toward your first home purchase up to a property value of £450,000.

95% Mortgages (Mortgage Guarantee Scheme)

The UK Government launched a new permanent Mortgage Guarantee scheme to replace the earlier temporary program. This works behind the scenes – the government offers lenders insurance on high loan-to-value mortgages, to encourage them to offer 95% LTV deals. Many major banks and building societies now comfortably offer 5% deposit mortgages on properties up to £600,000^[9].

4. Common Mistakes to Avoid

Not getting a Mortgage in Principle early – One of the most significant mistakes is delaying the pre-approval process until after you've started looking at homes.
Underestimating the "offers over" factor – Budget extra cash beyond your deposit for properties that sell above valuation.
Not engaging a solicitor early enough – In Scotland's fast-moving market, you need one on standby before viewing.
Using a broker unfamiliar with Scottish specifics – LBTT, missives, and Home Reports all work differently than in England.
Forgetting additional costs – Legal fees, LBTT, surveys, moving costs, and potential holding deposits all add up.

5. Get Expert Help with Your First Home

Navigating the Scottish property market can feel overwhelming, but you don't have to do it alone. A whole-of-market mortgage broker like McGhie Mortgages can:

Compare thousands of mortgage products from across the market
Explain Scottish-specific processes (Home Reports, missives, closing dates)
Help you understand which support schemes you qualify for
Guide you through the application process from AIP to keys in hand

Ready to take the first step? Book a free, no-obligation consultation with McGhie Mortgages today.

Frequently Asked Questions

How much deposit do I need as a first-time buyer in Scotland?

Most lenders require a minimum deposit of 5% of the property price, though putting down 10% or more will give you access to better interest rates and a wider choice of mortgage products. For example, on a property priced at £200,000, you would need at least £10,000 saved. Some government-backed schemes may also help top up your deposit.

What is the LBTT threshold for first-time buyers in Scotland?

First-time buyers in Scotland benefit from a Land and Buildings Transaction Tax (LBTT) relief that means no tax is payable on properties up to £175,000. This is a significant saving compared to the standard LBTT threshold of £145,000. For properties above £175,000, you only pay LBTT on the portion exceeding that threshold, at the standard rates.

What is a Home Report and do I need to pay for one?

A Home Report is a document pack that sellers in Scotland are legally required to provide before marketing their property. It includes a single survey, an energy report, and a property questionnaire. As a buyer, you do not pay for the Home Report — the seller covers this cost. The survey within the Home Report includes a valuation that mortgage lenders use when assessing your application.

Why should I get a mortgage Agreement in Principle before viewing properties?

An Agreement in Principle (AIP) is a conditional confirmation from a lender stating how much they are willing to lend you. Having one in place before you start viewing shows sellers and estate agents that you are a serious, financially prepared buyer. In Scotland's competitive property market, where closing dates are common, an AIP can make your offer more credible and help you act quickly when you find the right property.

How long does it take to buy a house in Scotland from start to finish?

Once your offer is accepted in Scotland, the process from acceptance to completion typically takes around 6 to 8 weeks. However, the overall timeline including saving a deposit, securing a mortgage, and finding a property can take several months. The Scottish conveyancing system is generally faster than in England because once missives are concluded the sale becomes legally binding, which reduces the risk of delays from gazumping or broken chains.