New Lloyds data shows stronger first-time buyer activity in key urban markets
Manchester has emerged as the leading location for first-time buyers outside London, with those purchasing their first home now accounting for more than seven in 10 mortgaged purchases in the city, according to new figures from Lloyds.
The bank’s analysis looked at local authority areas beyond the capital to find where first-time buyers form the largest share of all mortgaged home purchases. It follows a period of higher house prices and borrowing costs, during which affordability has been a central concern for those entering the market for the first time.
According to Lloyds, first-time buyers represented 70.2% of all mortgaged home purchases in Manchester in the most recent year, up from 67.2% in 2024. This is the highest proportion recorded in any area of Britain outside London.
The lender said Manchester continues to attract younger purchasers due to a combination of relatively lower property prices compared with the capital, significant employment opportunities, ongoing regeneration schemes and extensive transport links. The city also saw the highest number of people buying their first home in 2025 since 2019.
Sandwell in the West Midlands ranked second in the latest analysis, with first-time buyers accounting for 69.7% of mortgaged purchases.
Source: Lloyds Banking Group
Affordability and the rent versus buy equation
Lloyds’ research suggests that monthly repayments for some first-time buyers may be lower than renting a comparable property, potentially enabling borrowers to reduce outgoings and build equity at the same time.
Raising a deposit continues to be cited by most first-time buyers as the main barrier to homeownership, pointing to a role for low-deposit products, particularly for the majority who purchase jointly and can rely on more than one income.
Using Manchester as an illustration, Lloyds calculated that a typical first-time buyer property priced at £230,090 would require a 5% deposit of £11,505. On this basis, and assuming a five-year fixed rate of 4.72% over a 30-year repayment term, monthly mortgage payments were estimated at around £1,136. This was said to be roughly £200 below the city’s average private rent of £1,337.
The bank estimated that, after five years on this example mortgage, the borrower could have built up about £18,682 in additional equity through capital repayment. Even if property values did not rise over that period, the loan-to-value ratio would fall from 95% to 87%.
When combined with the cumulative saving from paying less on a mortgage than in rent, Lloyds suggested a first-time buyer in this scenario could be around £31,500 better off after five years, or about £20,000 when the initial deposit is taken into account.
Regional patterns across Britain
The research also highlighted differences in first-time buyer activity across Scotland and Wales.
In Scotland, Glasgow recorded the highest share of first-time buyers of any local area, at 61.2%, with an average purchase price of £182,910.
In Wales, Rhondda Cynon Taf had the largest proportion of first-time buyers, who made up 57.9% of the local market, with an average price of £156,035.
Source: Lloyds Banking Group
Where first-time buyer share is rising fastest
While large cities tend to have the highest overall concentrations of first-time buyers, Lloyds found that some of the fastest increases in first-time buyer share are occurring in smaller towns and more rural locations.
Worcester, a cathedral city, recorded one of the sharpest rises. First-time buyers accounted for 58.7% of the local housing market in 2025, up from 40.6% in 2024, indicating a marked shift in the profile of purchasers over a short period.
Source: Lloyds Banking Group
“Affordability is the number one priority for most first-time buyers, and we’re seeing more people cast their net wider to find places that match both their lifestyle and their budget,” said Amanda Bryden (pictured right), head of mortgages at Lloyds. “That flexibility can quite literally open up more doors.
“Manchester is a magnet for those seeking modern city-living, while increasing demand for Worcester’s more historic charm shows just how quickly new and unexpected hotspots can emerge.”
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