Innovative lenders and new rules quietly tipping the market toward underserved segment
By any measure, the journey onto the housing ladder has been one of the defining financial challenges of the past decade. But as the market looks ahead to 2026, there are growing signs that the dial may be finally beginning to move in favour of first-time buyers.
According to Lucy Lewis, National Account Lead at Skipton Building Society, the future looks bright —even if the road ahead still demands innovation and responsible lending.
“2025 was a year where affordability showed signs of improvement for first-time buyers. Rates were more settled and lower than previous highs. The clarification from the regulator on stress rates and the consultation on LTI limits helped create conditions where lenders were able to lend more and offer higher income multiples — at Skipton we were one of the first to move.”
And, with interest rates no longer at their peak, the outlook is cautiously positive. As Lewis told Mortgage Introducer, interest rates have eased from their peak and current market expectations suggest the possibility of a further cut this year, meaning she expects a continuing gradual improvement in affordability for first-time buyers.
“We’ll continue to see lenders do what they can to service the needs of first-time buyers — an area that Skipton is known for being innovative in,” she added.
Affordability misconceptions
That innovation matters because affordability challenges are not where many assume them to be. The Skipton Group Home Affordability Index showed that in Q2 2025, among potential first-time buyers, the proportion who can afford to get onto the property ladder in their local authority area sits at 11.5%. And the geography may surprise some.
“It’s a common misconception that affordability challenges are greater for people in the South, but our Index highlighted Cardiff as the least affordable local authority area for potential first time buyers, with other areas in Wales making up 5 of the 6 least affordable,” added Lewis.
Despite shifting conditions, some barriers remain stubbornly familiar. According to Lewis, the fundamental barriers for first-time buyers remain the same, namely the ability to save the deposit needed and ability to meet lenders’ affordability criteria.
“We are seeing more and more lenders innovating to help borrowers with these challenges. Skipton was the first to launch a mortgage for first-time buyers stuck in the rental trap that required no deposit - with no additional support from family,” explained Lewis. “With information at their fingertips, we’re seeing more buyers opting to take advice from our large community of mortgage brokers, and being encouraged to do so earlier in the process rather than waiting until they’ve fallen in love with a potential new home. This can only be a positive.”
Regulatory updates, data policies and shifting societal norms
Regulation, too, is setting a constructive tone. As Lewis told Mortgage Introducer, the FCA has set the tone: enable responsible growth while widening access to sustainable homeownership.
“From the FCA’s commitment to make growth a ‘cornerstone’ of its strategy, to consultations on the future mortgage rules, stress testing, and LTI flow limits… Together, these milestones point to a market that’s expected to innovate faster, serve better, and include more people previously left on the periphery. The FCA has committed to act at pace to bring forward proposals to support first-time buyers and underserved consumer groups in 2026 and we welcome that.”
Behind the scenes, data is becoming just as powerful as policy. As Lewis explained, at Skipton they know brokers want clarity, forward looking insight and actionable intelligence. Which is why, as Lewis said, “we’ll continue to use our wealth of data and the Skipton Group Home Affordability Index to highlight the challenges faced by first-time buyers… as well as lobbying the government and regulators to make any necessary changes to ease the burden.”
The profile of first-time buyers themselves is also shifting.
“The age of first-time buyers is increasing… societal norms have changed and people are settling down and having children later in life, the oldest first-time buyer we helped last year was 75. Affordability constraints mean that some buyers are now taking their mortgages over longer terms, with up to 40 years offered as standard. Whilst there is lots of information available, it’s not uncommon for someone to leave an appointment, with a different mortgage to the one that they thought would meet their needs and circumstances.”
Solutions designed to meet affordability needs
Despite these changes, one aspect at Skipton remains constant — the teams’ continual commitment to having innovation at the heart of their strategy. As part of that commitment, Skipton highlighted three specially designed solutions poised to help more people find homes in 2026 and beyond.
Track Record is designed for renters or for those who haven’t owned a property in the last three years, with less than a 5% deposit — including no deposit — who are 21+ and can prove that all rent has been paid for 12 months in a row, within the last 18 months. In 2025, Skipton received over £237m in Track Record applications — proof that recognising on‑time rent could turn “good payers” into first‑time buyers.
Income Booster (JBSP) brings up to four applicants/four incomes together, with no relationship requirement, with flexible ownership structures (no fixed ratio of borrowers to proprietors) and the ability for all applicants to reside. Supporting borrowers aren’t legal owners of the property, but they must get independent legal advice before applying.
In 2025 they saw £1bn in applications using Income Booster, underlining how collaborative affordability can help people access the first step on the housing ladder.
Delayed Start is aimed at first-time buyers and addresses the strain in the initial period of homeownership. Research shows that: 63% of FTBs feel financially strained in the first three months of home ownership; 43% struggle with their first mortgage payment due to other outgoings; 35% face a rental overlap alongside that first repayment. With no monthly repayments for up to the first three months (1, 2 or 3 months depending on the product chosen) after completion. Interest accrues from day one. The delayed start feature can be used alongside Track Record, Income Booster and Shared Ownership. Delayed Start helps to provide a more manageable transition into homeownership. Our Shared Ownership mortgages are only available in England and Wales. Rent payments to the housing association or registered landlord are still due from the start of the term.
And so, bearing all that in mind, is 2026 really a year for optimism? Lewis is confident it will be.
“We are cautiously optimistic. We’ll continue to do what we do best and speak to our members and brokers to understand what they are experiencing and look for ways that we can ensure we’re helping more people to have a home, in line with the founding principles of Skipton Building Society.”
This article was produced in partnership with Skipton Building Society.
