New figures reveal increased reliance on 100% LTV deals among first-time buyers
The number of zero-deposit mortgages issued in the UK climbed by 32% in 2024, according to a report by Lubbock Fine, a firm of chartered accountants and business advisers.
A total of 622 of these 100% loan-to-value (LTV) mortgages were completed last year, up from 470 in 2023. The combined value of the loans reached £197 million.
These products, which allow borrowers to take out a mortgage without a deposit, are aimed at those unable to save for a down payment — commonly younger or lower-income homebuyers. A guarantor, typically a close family member, is usually required, and lending is often capped at 4.5 times the borrower’s salary.
“Sluggish wage growth and high house prices have made zero deposit mortgages an attractive option for people looking to get on the property ladder,” said Lubbock Fine partner Andy Noton. “Practically all these loans will be to first-time buyers who aren’t able to save large cash sums for traditional mortgage products and can’t rely on the Bank of Mum and Dad for a deposit.”
Despite the rise in popularity, Noton warned that zero-deposit mortgages remain high-risk. They typically carry higher interest rates than conventional mortgages, increasing monthly repayments and slowing down equity accumulation. That can limit refinancing options if rates fall in future.
Borrowers also face a greater chance of falling into negative equity — where the mortgage exceeds the home’s market value — especially if prices dip, which can harm credit scores and restrict access to future borrowing.
“People should be aware that these mortgages are risky,” Noton pointed out. “The monthly repayments can be hefty – even if you can afford the payments it will still take a long time to own your house outright.”
While 100% LTV lending was widespread before the global financial crisis — most notably by Northern Rock, which offered 125% loans — it has remained limited in the years since. The recent rise reflects growing challenges facing would-be homeowners, especially in a market where traditional deposit-saving routes have become harder to navigate.
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