But there are now more ways onto the housing ladder than many first-time buyers realise. Mortgage choice is now stronger and affordability has eased slightly. Lenders are creating products designed to widen access to homeownership and new rules mean that many can lend more generously.
Affordability boost
According to Lloyds Bank’s latest affordability review, first-time buyer affordability has improved to its best level in years. Lower mortgage rates, slower house price growth and continued wage growth have all helped ease pressure.
Lloyds estimates that the typical first-time buyer mortgage payment is now around £259 a month lower than renting, and the average first-time buyer home costs 5.9 times earnings at £237,518 – the lowest ratio since 2015.
Amanda Bryden, head of Halifax Mortgages, said: “Lower mortgage rates, rising wages and slower house price growth mean affordability is steadily improving for first-time buyers. While challenges remain, conditions are better than they have been for several years.”
However, saving a deposit remains the biggest barrier. Propertymark has warned of a growing divide between first-time buyers who can rely on family support or inheritance and those who depend on their own savings.
Your Mortgage Awards 2024/25: winners revealed
Sponsored by Your Mortgage Awards
So what are your options if you are dreaming of a home of your own in 2026?
Low-deposit mortgages
For many first-time buyers, 90% and 95% mortgages are the starting point. These allow buyers to put down a 5% to 10% deposit and borrow the rest.
And there are lots to choose from. Moneyfacts data shows that there are currently around 1,360 mortgage deals available at 90% and 95% loan-to-value (LTV), the highest level in 17 years, as lenders actively compete again for low-deposit borrowers.
Despite this rise, Rachel Springall, finance expert at Moneyfacts, noted: “These deals represent just 19% of the market overall, and higher LTVs are only dropping by minuscule margins. Indeed, the average 95% and 90% LTV five-year fixed rate fell by just 0.02% and 0.01% month-on-month [to 5.4% and 5.27%].”
The Bank of Mum and Dad
With deposits and affordability still stretched, family-backed borrowing continues to play a major role.
Parents don’t always need to gift a deposit. One increasingly popular option is a joint borrower, sole proprietor (JBSP) mortgage. With this, a parent (or other family member) jointly borrows the mortgage alongside the first-time buyer to boost affordability, but does not go on the property deeds.
Guarantor-style arrangements, where a family member agrees to step in if repayments can’t be met or secures part of the mortgage with savings, are another option offered by some lenders.
Nationwide, named Best First-time Buyer Mortgage Lender at this year’s Your Mortgage Awards, offers low-deposit products designed specifically for first-time buyers, its Helping Hand mortgage for those with family support and lends on affordable homes schemes.
First-time buyer specific mortgages
Some lenders are taking a more innovative approach to affordability. One example is Skipton Building Society’s Track Record Mortgage, which assesses affordability based on rental payment history rather than traditional income formulas.
If you’ve been renting for at least 12 months and your rent is equal to or higher than your proposed mortgage payment, Skipton may be willing to lend where other lenders say no. This can be particularly helpful for long-term renters who have proven they can afford monthly payments but struggle to meet standard affordability criteria.
Skipton also won Best New Build Mortgage Lender at the Your Mortgage Awards.
Government-backed options
Shared ownership remains one of the best-known government-backed routes onto the ladder. Buyers purchase a share of a home – often 25% to 50% – and pay rent on the rest, reducing both the deposit and mortgage needed. You can buy additional shares over time as your circumstances improve.
Leeds Building Society, named Best Shared Ownership Mortgage Lender at the Your Mortgage Awards, is a specialist in this area.
Other government schemes include First Homes, which offers a 30% to 50% discount on selected new-build properties for eligible first-time buyers, and Right to Buy or Right to Acquire, which allow eligible council and housing association tenants to buy their homes at a discount.
As with any scheme, it’s important to understand the pros and cons, particularly around selling in the future.
Specialist lenders for complex circumstances
If you don’t fit the standard criteria used by high-street lenders, for example if you’re self-employed or have a minor credit blip, getting a mortgage can be harder.
Specialist lenders take a more flexible approach, often using manual underwriting to assess individual circumstances rather than relying solely on automated scoring. This can help buyers who have been turned down elsewhere.
Pepper Money, which won Best Specialist Lender at this year’s Your Mortgage Awards, is one example of a lender operating in this space.
Help at hand
Buying your first home remains challenging, particularly for those without family support. But there is now a wider range of mortgage products and schemes designed to help you take that first step.
Affordability is improving, mortgage choice is strong, and there are multiple routes onto the ladder depending on your circumstances. The key is understanding which options genuinely apply to you and getting advice early.
