Brokers point to easing rates, rent pressure and more flexible affordability as higher borrowing returns to the purchase market
First-time buyers are re-emerging as a meaningful source of purchase activity, with brokers reporting rising enquiry levels and a growing willingness to borrow more - driven as much by rent pressure and regulatory change as by falling mortgage rates.
Average first-time buyer loan sizes have pushed beyond £210,000 as softer stress testing, greater regulatory flexibility and renewed lender competition expand how much buyers can borrow. Brokers say the more significant shift, however, has been in confidence rather than risk appetite.
Confidence returns before demand fully accelerates
That confidence has not translated evenly across the market. Sadia Mehmood of The Mortgage Mum said she has seen “more purchase business taking place” even if demand itself remains patchy. “I personally haven't seen a strong first time buyer demand,” she said, adding that “since the budget has taken place there is more confidence with buyers”.
With interest rates now at their lowest levels for some time, Mehmood said many buyers feel conditions are more favourable. “Buyers feel it is a good time to buy,” she said, adding that if rates continue to fall into next year “then this will be sustainable”.
In other parts of the market, activity has picked up more sharply. Rebecca Geer of Oakdene Mortgages said first-time buyer enquiries have accelerated into what would normally be a quieter period. “We’re seeing a huge increase in first-time buyer demand, which is unusual for this time of year,” she said. “The market feels far busier than we’d typically expect in December.”
Why higher borrowing is not purely about affordability
Rising loan sizes, brokers argue, reflect structural pressures rather than stretched affordability. Geer said higher borrowing is being driven by “a combination of factors”, including “rising house prices, buyers stretching to secure the right property and lenders offering more flexible affordability assessments”.
Rent levels are also playing a growing role. “Many clients are finding that mortgage repayments can be comparable to, or even lower than, what they’re currently paying in rent,” Geer said, which “encourages them to borrow more to get onto the property ladder”.
Despite this, advisers report little evidence of buyers pushing to the limits of what lenders will allow. Kessar Salimi of Freedom Financial said falling rates and a slower housing market have created opportunity without triggering excessive risk-taking.
“We are seeing more first time buyers enter the market,” he said, adding that this is due to “rates coming down and the home buyer market slowing which is creating opportunities for buyers along with lenders offering first time buyer incentives”.
He said this behaviour appears measured. It “does feel sustainable”, Salimi said, as advisers are “not seeing many buyers trying to max out their affordability”. Instead, “first time buyers [are] being conservative when offering and factoring other costs like council tax, SDLT and utilities”.
Lenders reposition for first-time buyer growth
From a lender perspective, the renewed momentum reflects deliberate strategy rather than short-term opportunism. Craig Head of Mortgage Required, said regulatory change has freed lenders to compete more aggressively for first-time buyer business.
“We certainly have seen a consistent increase in first time buyer demand over the course of this year,” he said, adding that FCA relaxation has allowed lenders “to be more innovative with their products and more flexible with their affordability”.
That shift has fed directly into borrowing levels. “Predominately this is based on the increase in lender affordability,” Craig said, which “has enabled clients to borrow higher sums that have previously been available and this has pushed up the average loan size”.
Looking ahead, he sees little sign of retrenchment. “I can see no signs of lenders backing away from this sector of client in 2026,” Craig said, adding that falling rates and more high loan-to-value products will continue to fuel competition.
Whether the current momentum carries into next year will hinge on interest rate movements and wage growth. For now, brokers agree that first-time buyers are no longer on the sidelines, and that lenders are actively reshaping their propositions to capture a growing share of the purchase market.
