First-time buyers are leaning harder on high loan-to-value mortgages, analysis of UK Finance data from HouzeCheck has revealed.
In the first quarter of 2025 the average LTV on a first-time buyer mortgage rose to 77.1%, an increase from 74.7% in Q1 2024.
Richard Sexton, commercial director of HouzeCheck, said: “The days of massive equity cushions are over – and they are unlikely to return anytime soon.
“First-time buyers are borrowing more to finance property purchases. Some would argue that it’s a sign of confidence in the market.
“I don’t think that’s the case: it’s a sign that potential first-time buyers living in rented accommodation can no longer save for deposits.
“As landlords have left the market in the face of unhelpful regulation, the supply of rented property has shrunk, and rents have risen.
“There’s no sense that first-time buyers have hit a ceiling in how much they can stretch, either – look at the increasing number of zero deposit mortgages available now.”
Average LTVs on first-time buyer mortgages are much higher in Scotland, where they rose to 82.4% in Q1 2025, up from 81.0% in Q1 2024.
Sexton added: “The average LTV for a new first-time buyer mortgage in Scotland is high, even compared to London. And it’s still rising.
“The problem is that buyers in Scotland haven’t been in a position to save for decent deposits for longer because the landlord exodus started earlier there.
“Housing is a devolved matter and anti-landlord legislation started earlier north of the border nudging up rents, limiting tenants’ ability to tuck money away.
“First-time buyers in Scotland are increasingly turning to high LTV mortgages to get a foothold on the property ladder.”
Average LTVs for first-time buyers are rising fastest in East Anglia (up from 73.6% in Q1 2024 to 76.2% in Q1 2025), the South East (up from 74.0% to 77.3%), and in Greater London (from 67.1% to 72.0%).