New data highlights the ongoing struggle faced by first-time buyers
It’s one of the most enduring challenges in the property market – the plight of first-time buyers trying to secure the funding they need to be able to achieve the dream of homeownership. New data suggests there is a significant uptick in what lenders are willing to lend first-time buyers, but while they have started to offer bigger loans in the last three months, they are not keeping pace with house price rises or a tough salary market.
The report from intermediary platform, Acre, paints a striking picture of the tightrope first-time buyers and others are facing when it comes to borrowing vs income and house prices. Its data suggests that first-time buyers are receiving significantly higher mortgage loan sizes - up from 1.49 x to 1.57 x of the requested size - compared to what they have requested. But even with first-time buyers borrowing 5% more than in 2024, it's not keeping up with house-price rises, showing that actual loan-to-value ratios are increasing and FTBs still lose out, Acre claims.
Its findings are based on over 14mn affordability requests made this year, through Acre, and the corresponding lender results received by thousands of mortgage advisers. The platform handles 2.8mn affordability requests per month. The research also shows the stark reality of the north-south affordability divide - with northern England displaying cautious borrowing, and Scotland borrowing more. First-time buyers there, on average, borrow 82% of the value of their property. Existing homeowners are also over extending themselves, according to Acre’s report, preferring interest only mortgages of higher borrowing rather than the repayment of a lower loan.
Mortgage adviser India Mustafa (pictured left), from JMS Financial Services Group, knows only too well the difficulties first-time buyers face to get their own home. “Most of my clients are first-time buyers and with today’s property prices and high cost of living, most can only afford to save a 5-10% deposit, or if they are lucky, have their deposit gifted to them from a family member.”
Mustafa said she has to place most of her first-time buyers with a lender who offers a scheme to boost their, enabling them to reach the loan amount needed to buy the property. “In most cases it is very tight, especially when a product fee is added onto the loan,” she said. “With a high loan to value and the fact that they are on a scheme, they are missing out on more affordable rates and having to fix in on a higher rate for longer, depending on lender. But if it wasn’t for the lenders creating these new schemes to help the average first time buyer, it would be a real struggle to get onto the property ladder, even more than it is already.”
While noting that there is an increasing number of lenders who can do higher, multiple lending exclusively for first-time buyers , Louis Levine (pictured centre), senior mortgage broker at Orton Financial, acknowledges how tough the market is for borrowers more widely. “It is a challenging market across the board at the moment, not exclusively to FTBs,” Levine said. “The problem is the market is suffering from Stamp Duty costs and a dampened economic outlook harming wages. There are also less starter homes available as those who currently own have no ability to move up the ladder and no incentive to move down.”
Meanwhile, mortgage broker Katy Lehman (pictured right), commented: “While it’s encouraging to see lenders increasing loan offers slightly, it’s not enough to offset the growing gap between house prices, salaries, and living costs. First-time buyers are being asked to do more with less — and the pressure is mounting, not just financially but emotionally. We need to move beyond viewing affordability as just a lending equation. For many, it now comes at the cost of quality of life. People aren’t just buying homes — they’re overextending themselves simply to afford their bills. That stress adds up, especially when paired with limited support and financial education.”
Lehman further notes that young people are taught how to pass exams but not how to manage money, understand inflation, or navigate the housing system. “Without early financial literacy, buyers are left navigating life-changing decisions with little grounding,” she said. “This is where the government could play a bigger role — not only in addressing inflation, but in preparing future generations through meaningful, practical education. The regional data paints an important picture too. The north–south divide and different borrowing behaviours across the UK show that affordability is not just about numbers — it’s contextual, cultural, and deeply personal.”
She added: “With more homeowners now opting for interest-only borrowing just to stay afloat, it’s clear that affordability is no longer just about getting on the ladder — it’s about staying well on it.”
