First-time buyer mortgages are back — up 18% in 2025 and closing in on the 2022 high
First-time buyers may finally be turning a corner, with brokers reporting a sustained rise in activity, supported by more generous lender criteria and a broader range of high loan-to-value (LTV) products.
Yorkshire Building Society reported that first-time buyer mortgages surged to 390,324 in 2025, representing an 18% increase on 2024, pushing activity back towards the 2022 high-water mark of 405,250.
While that earlier high was fuelled by government incentives, pandemic-era demand and rock-bottom rates, this latest resurgence appears to be driven more by regulatory shifts, product innovation and lower mortgage rates that are steadily easing pressure on household budgets.
Brokers on the frontline are already feeling the impact.
“I’ve been seeing a sustained increase in first-time buyer enquiries for some time now,” broker India Mustafa told Mortgage Introducer. “First-time buyers are my speciality, so I’m both hopeful and optimistic that these trends will continue over the longer term, allowing me to offer even greater support to those looking to get onto the property ladder.”
Higher income multiples and 95% LTV products leading the charge
Mustafa believes the key drivers have been a combination of lenders stretching income multiples for first-time buyers and the return of genuinely accessible high-LTV options.
For many would-be buyers, especially those in higher-cost areas or renting privately, traditional income multiples have often fallen short, even when their monthly rent is comparable to – or higher than – the mortgage payments they would face. The ability to borrow a little more against income can therefore be the difference between remaining a renter and crossing the threshold into homeownership.
At the same time, the broader availability of 95% LTV products is easing one of the most stubborn barriers for first-time buyers: the deposit. For clients without access to significant family support, the difference between needing 10% and 5% can represent several years of additional saving – especially in an environment of high rents and elevated living costs.
Adverse credit: from red flag to reality
Another quiet but important shift has been the way lenders treat adverse credit. While clean-credit borrowers understandably remain the easiest to place, Mustafa said more lenders are accepting that minor or historic blips are now part of the landscape, rather than an automatic dealbreaker.
“More lenders are gradually relaxing their criteria around adverse credit. Given how common adverse credit has become, it’s no longer something lenders can simply disregard,” she stated.
From missed payments on utilities and mobile contracts to small defaults accrued during the cost-of-living squeeze, adverse credit has become a feature of many otherwise strong applications. As Mustafa noted, this reality is starting to be reflected in underwriting – although there are still clear limits.
“That said, borrowers with more complex adverse credit are still finding options more limited, particularly at higher loan-to-value levels,” she added.
For brokers, this means careful case placement and expectation management remain crucial. While there may be more doors open for clients with light or well-explained adverse credit, it is not yet a free-for-all. High LTV plus heavy adverse remains a difficult combination, and clients often need to compromise on either their borrowing level or their timescale to buy.
Brokers at the sharp end of the first-time buyer revival
As a specialist in the first-time buyer segment, Mustafa’s experience offers a frontline view of how policy, pricing and criteria are translating into real demand.
The increase in enquiries she is seeing suggests that sentiment among aspiring homeowners is improving – whether due to easing rates, the perception that “now is a better time to buy”, or simply fatigue with paying rising rents without building equity.
Mustafa’s optimism about the future is rooted in this combination of demand and lender appetite, reinforced by lender forecasts of near-record first-time buyer activity in the year ahead.
If income multiples remain supportive, 95% LTV options stay competitively priced and lenders continue to refine their approach to adverse credit, the conditions will be in place for a more sustained first-time buyer revival rather than a short-lived burst of activity.
However, the balance will be delicate. Any sharp reversal in criteria, retreat from high-LTV lending or renewed shock to household finances could quickly cool demand. That is why the evolution of product design and underwriting – rather than headline-grabbing short-term schemes – may ultimately prove most important.
For now, specialists like Mustafa are clear: first-time buyers are back in the market in greater numbers, and lenders appear more willing than they have been in recent years to meet them halfway.
