Nearly half of first-time buyers in the UK are now putting down deposits of less than £20,000, a sharp rise from just over one in ten the year before. That shift tells you something important about the market right now: the old rule that you need a huge pile of cash to get on the ladder is bending. I’ve been watching the UK property market closely for years, and the pattern I keep seeing is that the window of opportunity for first-time buyers changes fast — sometimes within weeks. The question of whether now is the right time to buy depends on understanding a few specific numbers, not on gut feeling. Here’s what you actually need to know.
Mortgage rates have climbed sharply since the start of 2026, with the average two-year fix rising by over a percentage point to 5.87 per cent, adding roughly £1,800 a year in repayments. That sounds discouraging, but it’s worth remembering that rates jumped even more dramatically after the 2022 mini-Budget — and the market adjusted. What’s different now is that lenders are pulling deals faster than before; the average mortgage offer in March was only available for eight days. If you’re serious about buying, you need to have your paperwork ready before you start shopping around. I’d also suggest looking into a property lawyer early in the process, because legal delays can cost you a good rate while you wait.
There’s also more choice than there has been in years. Around 40 per cent more homes are on the market compared to 2019, according to property group Connells. That means less competition and more time to find something that actually suits you. But the number of new properties coming to market fell by 7 per cent in March compared to the previous year, which suggests some sellers are holding back. The balance is shifting, and for a first-time buyer with realistic expectations, that can work in your favour. If you’re still weighing up whether renting makes more sense for your situation, our guide on renting versus buying in the UK breaks down the numbers side by side.
What a first-time buyer mortgage actually looks like in 2026
The most important thing to understand is that the market has shifted away from demanding enormous deposits. Barclays’ mortgage data for December 2025 showed that over one in five first-time buyers put down deposits of less than £20,000, a significant jump from 13 per cent the year before. The average deposit also fell by 14 per cent year-on-year. That’s not because people are suddenly richer — it’s because lenders are offering more products that allow higher borrowing relative to the property value. In December, 44 per cent of first-time buyers chose mortgages with an 85 to 90 per cent loan-to-value ratio, up from 41 per cent the previous year.
What this means in practice is that you don’t need a 20 per cent deposit to be taken seriously. The average first-time buyer deposit now equates to nearly 20 per cent of the average home value, up from just 12 per cent a decade ago, but that figure is skewed by cash-rich buyers in expensive areas. If you’re looking at properties around the £200,000 mark, a 10 per cent deposit of £20,000 is realistic and increasingly common. My advice would be to focus on getting your credit score in shape and having a full set of payslips and bank statements ready, because the eight-day window on mortgage offers means you can’t afford to scramble.
Why timing matters more than you think
The conflict in the Middle East has had a direct effect on the mortgage market. Lenders began pulling deals after the onset of the conflict, and by 20 April the total number of available mortgage products had declined by 12 per cent to 6,700. That includes deals specifically aimed at first-time buyers, who often need to borrow more relative to their income. Swap rates — which banks use to price mortgages — are currently about 0.5 to 0.7 percentage points higher than before the conflict, suggesting that lenders are building in a buffer for uncertainty.
For a first-time buyer, the practical effect is that you have less time to lock in a rate and fewer options to choose from. The average two-year fix now sits at 5.87 per cent, while the average five-year fix is 5.76 per cent. Those numbers are high compared to the ultra-low rates of a few years ago, but they’re still below the spikes seen after the 2022 mini-Budget. If you’re in London, the picture is tougher: houses purchased by first-time buyers cost on average 7.5 times their earnings, and mortgage payments consume more than half of take-home pay, compared to just over 30 per cent for the rest of the UK.
What I’d do if I were looking to buy in London right now is widen the search area. The data shows that regional markets are stabilising faster, and properties outside the capital offer much more manageable affordability. If you’re set on London, consider looking at shared ownership schemes or properties that need cosmetic work, which can sometimes be negotiated down. A guide to emerging regional property hotspots might give you some ideas for places where your money goes further.
Where first-time buyers trip up
The most common mistake I see is underestimating how quickly mortgage deals disappear. In March, the average mortgage product was available for just eight days. That means if you see a rate that works for you, you need to apply immediately — not think about it for a week. Nearly 15 per cent of first-time buyer transactions annually encounter avoidable pitfalls, many of which come down to timing and paperwork.
Waiting for the perfect rate that never comes
Some buyers hold out for rates to drop back to 2 or 3 per cent. That’s unlikely in the near term. Swap rates are still elevated, and lenders are pricing in ongoing uncertainty. The average five-year fix at 5.76 per cent is 0.81 percentage points higher than before the conflict. If you can afford the monthly payments at current rates, locking in now protects you from further increases. Waiting could mean paying more later.
Ignoring the total cost of buying
Stamp duty, legal fees, surveys, and moving costs add thousands to the upfront bill. The average first-time buyer home costs around £285,000, and stamp duty alone can run into several thousand pounds depending on the region. You need to budget for these costs on top of your deposit. A real estate lawyer can help you understand the full breakdown before you commit.
Overlooking energy efficiency
Post-pandemic, demand for properties with EPC B or C ratings has surged, and these homes often command a 3 to 5 per cent premium. But the flip side is that a low-rated property could cost you more in heating bills and be harder to sell later. If you’re choosing between two similar homes, the one with the better EPC rating is usually the smarter long-term buy.
Not having a backup plan for mortgage offers
With deals being pulled so quickly, it’s wise to have a second option lined up. Some lenders, like Barclays, offer products such as Mortgage Boost, which lets family members increase how much you can borrow without gifting cash directly. Knowing what alternatives exist before you start viewing properties can save you from panic decisions.
→ Scroll right to see all columns
| Mortgage type | Rate (March 2026) | Change since conflict onset |
|---|---|---|
| 2-year fixed (average) | 5.87% | +1.00 percentage point |
| 5-year fixed (average) | 5.76% | +0.81 percentage points |
| 75% LTV 5-year fixed | 4.43% | N/A |
| 95% LTV 5-year fixed | 5.12% | N/A |
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How to prepare for a first-time buyer mortgage in 2026
The key to buying now is preparation, not prediction. You can’t control where rates go next month, but you can control whether your finances are in order when a good deal appears. Here’s what I’d focus on.
Get your credit file clean and your documents ready
Lenders are running stricter affordability checks in 2026, often capping loan-to-income multiples at 4.5 times your salary. That’s down from 5 times during the low-rate era. Before you even start viewing properties, check your credit report for errors, gather three months of payslips and bank statements, and have your ID handy. When a mortgage deal only lasts eight days, you can’t afford to spend three of them hunting for a P60.
Work out what you can actually borrow
Use a mortgage calculator based on current rates, not the rates from two years ago. At 5.87 per cent on a two-year fix, your monthly payment on a £200,000 mortgage would be significantly higher than it would have been at 3 per cent. Be honest with yourself about what you can afford after bills, food, and an emergency fund. If the numbers are tight, look at properties below your maximum budget.
Consider family-assisted options
Barclays’ Mortgage Boost and Springboard Mortgage are two examples of products that let family members help without needing to gift cash. Mortgage Boost increases how much you can borrow based on a family member’s income or savings, while Springboard uses their savings as security — and they get their money back with interest. If you have family who are willing to help but don’t have a lump sum to give, these products are worth exploring.
Look beyond the headline rate
A mortgage with a slightly higher rate but lower fees can work out cheaper overall than one with a low rate and high arrangement fees. Ask your broker or lender for the total cost over the initial fixed period, not just the monthly payment. Also check whether the deal is portable — meaning you can take it with you if you move before the fix ends.
- 1Check your credit reportGet a free report from Experian, Equifax, or TransUnion. Dispute any errors and pay off small debts before applying.
- 2Get an Agreement in Principle (AIP)An AIP shows sellers you’re serious and gives you a clear budget. Most lenders offer these online in minutes without affecting your credit score.
- 3Compare mortgage deals dailyWith deals disappearing in days, check comparison sites every morning. When you find one that works, apply immediately.
- 4Instruct a solicitor earlyDon’t wait until you’ve had an offer accepted. A property lawyer can start reviewing documents and speed up the conveyancing process.
What’s coming next for first-time buyers
Looking ahead, the stamp duty changes that drove a surge in early 2025 sales have settled, but the underlying trend is clear: more people are buying with smaller deposits and higher loan-to-value ratios. Barclays reported that first-time buyer completions were up 70 per cent in March 2025, followed by a steady second half. Confidence among 18 to 34-year-olds rose from 33 per cent to 40 per cent during 2025, and Gen Z adults are more than twice as likely as the national average to plan a purchase in 2026. If you’re in that age group and you’ve been saving, the market is more accessible than the headlines suggest.
Frequently asked questions
Can I get a mortgage with a 5% deposit in 2026? ▾
How much do I need to earn to buy a £250,000 house? ▾
Is it cheaper to buy or rent right now? ▾
What happens if mortgage rates drop after I fix? ▾
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Can family members help without giving me cash? ▾
The market in 2026 is different from what it was five years ago, but not in the way most people assume. Deposits are smaller, more people are buying, and the number of homes available is higher than it’s been in years. The real challenge is speed — mortgage deals vanish in days, not weeks. If you’ve got your finances in order and you’re ready to move when the right property appears, now is as good a time as any to start. If this was useful, you might also want to read our analysis of whether the UK market is becoming too expensive for young buyers.
Sources and Further Reading
Coastal homes vs city living: where’s the smartest UK property investment? — Compares long-term value growth and lifestyle trade-offs between urban and coastal markets.
Downsizing dilemma: how to rightsize your UK property portfolio for retirement — Practical advice for older homeowners considering a move, with useful parallels for first-time buyers thinking about future-proofing.
Has conflict in the Middle East hurt the mortgage market?. Investors’ Chronicle, 2026.
Why 2026 could be the year of first-time buyers. Barclays, 2026.
The Definitive First-Time Buyer Guide 2026. British Property, 2026.
