Whether you’re a first-time buyer, a homeowner looking to remortgage, or an investor navigating the market, understanding these shifts is key to making informed decisions.
2025: A Market Slowly Finding Its Feet
Affordability has gradually improved across 2025 as swap rates settled, Bank of England guidance became clearer, and inflation moved closer to target. Although mortgage rates remain higher than pre-pandemic norms, they are now more predictable; and predictability itself is a major boost to both buyers and lenders.
Bank of England mortgage approvals have also strengthened, sitting at around 65,000 approvals per month by October 2025. This improvement signals renewed confidence across the mortgage market, even if volumes are still well below the peaks of 2021.
The Big Story of 2025: Lenders Targeting First-Time Buyers
As 2025 draws to a close, the mortgage market looks quite different from the one we were reviewing a year ago. While the past few years have been defined by volatility; rapid rate changes, inflationary pressure, and economic uncertainty; the landscape today is showing early signs of stabilisation.
But more importantly, 2025 has been the year that lenders began to actively chase first-time buyers again. With affordability still stretched for many households, banks and building societies are repositioning themselves with new criteria, higher income multiples, and innovative products designed to help renters and new buyers onto the ladder.
Many lenders have created First Time Buyer specific pathways to support affordability, and with the added help of the Bank of Mum and Dad, we are seeing a market that feels more competitive, more creative, and more focused on supporting the next generation of homeowners.
Key Lender First Time Buyer Updates
When looking across lenders to see their offers, they will often talk about Loan to Income (LTI) which is a measure that compares the size of a mortgage to the borrower’s annual income to assess how affordable the loan is.
Barclays introduced a 6× income multiple for eligible first-time buyers, one of the highest loan-to-income (LTIs) currently available.
Halifax expanded its support for new buyers through its First Time Buyer Boost, offering up to 5.5× income for qualifying applicants.
Nationwide widened access to Helping Hand in 2025, increasing higher-LTI support for buyers with strong affordability profiles.
Accord launched a £2,500 deposit product (up to £500k purchase price), supporting those with smaller deposits and removed the minimum income requirement for first-time buyers on higher loan-to-income lending above 4.49x, up to 5.5x income.
Skipton continued to scale its 100% deposit-free mortgage for long-term renters, keeping pressure on other lenders to innovate.
These changes signal an unmistakable trend: the fight for first-time buyers is on, and lenders are increasingly willing to stretch affordability — but only for applicants who meet tighter, more detailed criteria.
A crucial message for buyers
Higher LTIs do not translate into universal lending.
Eligibility will still depend on:
income stability,
deposit sources,
credit history,
spending patterns,
and property type.
The message for First Time Buyes is simple; even in a more supportive environment, advice, and preparation matter more than ever.
Innovation Beyond LTIs: Deposits, Schemes & Support
Alongside higher income multiples, lenders are also expanding their use of:
gifted deposits,
high-LTV FTB products,
flexible underwriting, and
schemes supporting renters.
We’re seeing a landscape where lenders recognise that deposits, not income, remain the most significant barrier to buying. As a result, 2025 has brought a noticeable increase in options tailored to low-deposit or no-deposit buyers, provided affordability is strong and the borrower’s profile fits.
Budget 2025 and the Impact on Households
The Autumn 2025 UK Budget delivered a mixed message for homeowners and buyers. While no sweeping housing reforms emerged, the Budget, combined with the OBR’s updated forecasts, played a key role in shaping sentiment.
Key economic takeaways included:
inflation projected to remain close to target,
modest GDP growth through 2026,
cautious but steady improvement in household real incomes.
All these factors directly influence lender appetite, pricing, and affordability models.
For Scotland, the 2026 Scottish Budget will be particularly important.
Potential changes to property taxation and block grant implications could shift the attractiveness of buying vs renting, but at this stage, the direction is still uncertain. The key message: keep the conversation open, as policy could influence market activity in mid-2026.
Market Outlook: 2025–2026
Industry forecasts point to steady, moderate recovery rather than rapid expansion.
What the experts say:
UK Finance expects lending volumes to rise modestly in 2025, with a cautious but improving trajectory into 2026.
The EY ITEM Club forecasts low, single-digit mortgage market growth in 2026, driven primarily by FTB activity.
OBR projections suggest slow real-income growth but improving stability, both positive signals for affordability.
The theme across all forecasts is consistent - 2026 will be about small gains, gradual improvements in affordability, and continued lender innovation, not a return to the boom years.
What This Means
With all the moving parts in the market, here’s what matters most:
1. Higher LTIs do not equal Easier Borrowing
They help — but only for eligible applicants. Advice remains essential.
2. Deposits Still Lead the Way
Gifted deposits, new low-deposit products, and support schemes can make a critical difference.
3. Timing Matters
Budget announcements, OBR forecasts, and lender updates consistently trigger spikes in application activity. Getting ahead of these moments can be a real advantage.
4. Lenders Are Innovating for You
2025’s biggest winners have been First Time Buyers, with this trend expected to continue through 2026.