First-time buyers dominate UK mortgage market as deposit sizes shrink

According to the Office for National Statistics, first-time buyers represented 52.8% of all mortgage sales in 2025, a substantial jump from the roughly one-third share recorded in 2006. Their median loan-to-value ratio climbed to 85.6% in 2025, the strongest leverage level seen since before the financial crisis, up from 85.0% the previous year. The report highlighted regional disparities, noting that buyers in the North East put down the smallest deposits as a share of property value, while higher prices in London forced larger down payments.

Concurrently, mortgage costs have risen, with Moneyfacts showing the average five-year fixed rate at 5.88%, the highest since October 2023, while the Bank of England’s base rate remained at 3.75%. The average mortgage now equals 3.5 times a borrower’s income, with first-time buyers at 3.6 times, slightly above the 2024 figure. Ian Futcher of Quilter said buyers are having to stretch further to enter the market amid these conditions.