Separate study also finds some of these buyers trapped in high LTV mortgages
Recent studies have highlighted the ongoing challenges confronting first-time buyers in the UK, with many reporting uncertainty about the homebuying process and a reliance on high loan-to-value (LTV) mortgages.
Research from Lloyds indicates that only 13% of prospective first-time buyers feel they fully understand the steps involved in purchasing a property. While 32% said they grasp most aspects, a significant proportion—42%—admitted to knowing only some of what is required.
Legal procedures, such as conveyancing and dealing with the Land Registry, were cited by 29% as the most daunting part of the process. Securing a mortgage and finding a suitable property were also common concerns.
Affordability remains one of the significant barriers for first-time buyers. Over one in five respondents said that the need to save a substantial deposit had delayed their plans to buy, while 19% were apprehensive about their future income or job security.
Despite these obstacles, 65% of those surveyed intend to consult a lender or mortgage broker for advice, though nearly one in five do not plan to seek any guidance. Parents are the most trusted advisers, particularly among younger buyers aged 18 to 24.
“Buying your first home is a big milestone, and it’s natural to feel uncertain – especially with so much to consider,” said Amanda Bryden (pictured right), head of mortgages at Lloyds. “The good news is there’s plenty of help available, from clear online guides to a conversation with a qualified mortgage adviser or broker.
“With the right support, taking that first step onto the property ladder becomes much more manageable. And with mortgages available with as little as a 5% deposit, it’s often more affordable than you might think.”
Meanwhile, separate research by compliance and affordability technology provider Armalytix reveals that half of first-time buyers are now taking out mortgages at 90% LTV or higher, with one in seven borrowing at 95% LTV or above.
In contrast, only 22.6% of repeat buyers use mortgages above 90% LTV, underscoring the greater risks faced by new entrants.
“High LTV has become the new normal for first-time buyers,” said Mike Ward, chairman at Armalytix. “While government schemes like the Lifetime ISA or Help to Buy ISA certainly help, family gifts increasingly determine who can move forward and who remains stretched. Those with larger family backing move ahead, while others face higher costs and greater risk.
“First-time buyers are navigating a high-pressure market with limited room for error. Understanding the role of family support, government schemes, and borrowing risks is crucial for anyone advising or lending in this market.”
Despite the availability of government support, uptake remains limited, with only 32% of eligible first-time buyers using a government ISA this year. For most, family gifts remain the primary means of reducing borrowing.
The findings suggest that mortgage professionals should be aware of the knowledge gaps and financial pressures facing first-time buyers. Clear advice and an understanding of family support mechanisms are essential for supporting clients through the process.
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