Getting a foot on the property ladder is a dream for many people, and when buying your first property, timing can have an effect on both the price you pay and the availability of an affordable mortgage.
Activity in the housing market fluctuates due to seasonal changes in supply and demand and because of wider economic conditions. From a seasonal viewpoint, the busiest period for the housing market is between March and September, with the peak being between March and July. This is usually the best time to start searching for your first home as there will be a large number of properties on the market.
However, the availability of affordable mortgages also fluctuates, again driven by economic conditions. When the economic backdrop is positive the housing market will be active with prices increasing and a large range of affordable mortgages available. Conversely, when the economic backdrop is negative house prices start to stagnate, or even fall, and the availability of mortgages reduces as lenders become nervous about lending in a falling market.
Current housing market
Over the course of 2022 and through most of 2023 the housing market went through a turbulent time due to the events of the mini budget in September 2022 as well as persisting inflationary pressures. House prices fell to £281,713 at the end of 2022 before increasing gradually throughout 2023. The average UK house price increased to £287,891 in March 2023 before falling slightly over April and May 2023 with the figures indicating that the average house price in the UK then was £286,532. The average price of a UK house in September of 2023 was £278,601 and this increased marginally to £287,105 by the end of the year in December 2023. After a short-lived dip in average UK house prices during the first quarter of 2024, house prices rose very slowly over the remaining year ending up at just over £298,000. For regular updates on the state of the housing market, read our article "What is going to happen to UK house prices?".
Although the rise of inflation has slowed, interest rates remain relatively high compared to what were very low rates before September 2022. There are some clear signs of competition amongst lenders forcing interest rates down bringing them down from the lofty heights in early 2022. This makes homeownership easier than it was at the same time last year although some may still find it difficult to meet lenders' qualifying criteria due to affordability that has been hindered by the increased cost of living.
The Bank of England reports that October this year saw 68,300 mortgage approvals, the highest since August 2022 - approvals have been increasing month on month throughout the latter part of 2024.
Eligible first-time buyers received a boost when the Stamp Duty Land Tax (SDLT) threshold was increased from £300,000 to £425,000 in September 2022. This means that stamp duty is only payable on properties worth over £425,000 and up to £625,000. First-time buyers purchasing properties worth more than £625,000 will not receive first-time buyer stamp duty relief, meaning stamp duty is payable at the standard rate. From April 2025, the thresholds for first-time buyer stamp duty relief are to be reduced so that the nil rate threshold will apply up to £300,000 (lowered from £425,000), and 5% will be payable on the purchase price between £300,000 and £500,000. If you buy a property costing over £500,000 then the first-time buyer relief will not apply. You should refer to our article 'Everything you need to know about stamp duty' for more information.
Current mortgage market
The availability of mortgages with a low deposit has increased over the course of 2025 as inflation has shown signs of slowing. Mortgage products have risen by almost 700 from the same time last year giving homebuyers more mortgage deals to choose from. The number of mortgage deals available with a 5% deposit has risen to 365, the highest in over 2 years. First-time buyers continue to benefit from lenders being incentivised to lend at 95% loan-to-value (LTV) with the support of the government's mortgage guarantee scheme which provides assurances to lenders when they take on borrowers with small deposits. Lending at income multiples of 5 and 5.5 times income for higher loan-to-value mortgages has also grown with Leeds Building Society offering 5.5 times borrowing with as little as 5% deposit on first-time homebuyer purchases.
For a guide to the best mortgage products, check out our articles on the best and cheapest 95% LTV and 90% LTV mortgage deals. We also have a more in-depth guide "How much deposit do first-time buyers really need?".
Although the time to secure very competitive rates may now have passed, rates are showing signs of recovery. There is still growing demand for fixed-rate mortgages among first-time buyers as they attempt to avoid the impact of interest rate rises further down the line that may challenge their household budgeting. Affordability assessments are a key component to securing a mortgage deal so the rise in the cost of living could significantly impact how much you are able to borrow.
A number of niche but useful options could prove successful in helping first-time buyers onto the property ladder, including Skipton's 100% track record mortgage for renters. Guarantor mortgages continue to offer first-time buyers the option to use a helping hand to get onto the property ladder and you can read about these in our article 'What are guarantor mortgages – and are they a good idea?'. First-time buyers struggling to afford a mortgage may wish to take a look at our independent Tembo review, a mortgage broker that specialises in helping first-time buyers onto the property ladder.
How to get the best first-time buyer mortgage deal
If you are a first-time buyer it is important to understand that lenders will be more cautious when it comes to granting you a mortgage. Making sure your finances are in good order, having a clean credit report, together with a provable regular income are all desirable before applying for a mortgage. To see the best mortgage deals for your own personal circumstance use our Mortgage Best Buy Table and enter a property value as well as your deposit amount.
The larger the deposit you have accumulated, and assuming you have a good credit history, the more likely you are to be accepted for a mortgage and you will also have a wider range of deals to choose from. The bigger your deposit, the lower your mortgage needs to be, which means a lower loan-to-value ratio (LTV). The lower your loan-to-value ratio the better the mortgage deal you are likely to secure as interest rates are more competitively priced at 60-80% LTV ratios.
When arranging a mortgage you can apply directly to a lender or use the services of a mortgage broker, such as Habito* which is an online mortgage broker. Alternatively, you can source a mortgage broker in your area using the directory services VouchedFor* or Unbiased* - both of these websites will allow you to search for vetted financial professionals local to you based on customers' reviews.
Applying directly to a lender will limit your choice of mortgages whereas using a reputable mortgage broker will provide a wider choice of lenders and mortgage deals. Before applying for your first mortgage make sure you check all the details of the loan and the costs involved so that you fully understand your commitments.
If a link has an * beside it this means that it is an affiliated link. If you go via the link Money to the Masses may receive a small fee which helps keep Money to the Masses free to use. But as you can clearly see this has in no way influenced this independent and balanced review of the product. The following link can be used if you do not wish to help Money to the Masses - Habito, VouchedFor, Unbiased
