Becoming a homeowner for the first time is one of the most exciting yet challenging financial milestones in life, especially in 2026’s evolving UK property market.
With recent improvements in affordability and more dynamic mortgage products emerging, first‑time buyers have fresh opportunities, but key hurdles remain, particularly in London.
This guide walks you through the latest trends, financial realities, and strategic advice for stepping onto the property ladder this year.
Market Trends: More First‑Time Buyers, But Regional Disparity Persists
Across the UK, first‑time buyer activity has been rising. In 2025, estimates show that first‑time buyer mortgage transactions increased by nearly 18% compared with the previous year, driven by improved affordability and eased lending conditions.
Industry forecasts also indicate that first‑time buyers are expected to remain the largest buyer group in 2026, even as overall sales moderate.
However, the national picture masks regional differences. Despite broader improvements, London remains significantly more expensive and less affordable compared with other parts of the UK.
Affordability: Making Sense of Costs and Borrowing Power
Affordability has improved for many prospective buyers, with slower property price growth and relatively stable mortgage rates helping reduce monthly costs. In 2025, data showed that housing affordability for first‑time buyers improved to its lowest house price‑to‑earnings ratio in over a decade outside London.
The UK Picture
Average deposit for first‑time buyers has increased but remains achievable with disciplined saving.
First‑time buyers increasingly use brokers, with over 70% relying on professional advice when navigating finance options.
Rental costs now often exceed what mortgage payments would be, making ownership financially attractive when a deposit can be raised.
London Challenges
Although house prices in London have softened slightly, affordability in the capital is still stretched. A typical first‑time buyer in London may need around nine years to save a 10% deposit, compared with around six years nationwide.
Nationwide’s house price‑to‑income ratio for Londoners remains high, with prices around seven to nine times typical incomes — far above the UK average.
Saving for a Deposit: Strategies and Realities
The first major hurdle for new buyers is saving a deposit. While national averages vary, London requires notably higher deposits due to elevated prices.
Effective deposit strategies:
Consistent monthly saving plans
Using a Lifetime ISA (LISA), which adds a 25% government bonus (up to £1,000 per year), where eligible
Consider gifted deposits from family — still a key support mechanism for many buyers
Even with disciplined saving, many first‑time buyers today are older than in previous decades, often buying in their early to mid‑thirties with more established incomes.
Mortgage Options in 2026: What’s Available
The mortgage market in 2026 reflects both innovation and increased flexibility:
Many lenders are offering higher loan‑to‑income multiples, making it possible to borrow more relative to earnings.
Some products allow low or zero deposit options, particularly for buyers with strong rental payment history or family support.
Brokers remain vital for helping buyers secure the most competitive deals, especially for first‑time applicants navigating multiple lender criteria.
With the right preparation, first‑time buyers can now access a wider range of mortgage choices than in previous years.
Practical Tips for First‑Time Buyers in 2026
1. Get your finances in order first
Check your credit score, reduce debt where possible, and set a realistic savings plan.
2. Use professional mortgage advice
Mortgage brokers can help you understand the products best suited to your income, deposit, and long‑term goals.
3. Consider location flexibility
Prices and affordability vary significantly across the UK. Exploring commuter towns or regions outside London may offer a more accessible path to ownership.
4. Prepare for additional costs
Legal fees, stamp duty, surveys, and moving costs all add to your upfront expenditure — and they matter.
5. Don’t wait for perfect timing
With forecasts predicting modest price growth in 2026, getting on the ladder sooner can be financially advantageous if you’re ready.
Looking Ahead: 2026 and Beyond
While challenges remain — notably in London — the outlook for first‑time buyers in 2026 is cautiously optimistic. Affordability improvements, innovative mortgage products, and better access to broker‑led advice are all helping more people step onto the property ladder.
At IMC Financial Services, we understand that every first‑time buyer’s journey is unique. Whether you’re just starting to save or ready to apply for a mortgage, expert guidance can make a substantial difference in achieving your homeownership goals.
Sources
UK first‑time buyer mortgage sales trends and growth data (Office for National Statistics)
Estimated increase in first‑time buyer mortgage transactions in 2025 (Yorkshire Building Society)
First‑time buyer market share and 2026 outlook (Zoopla)
National housing affordability improvements and regional disparities
First‑time buyer deposit and attitude data (Aldermore First Time Buyers Index 2026)
Comparison of mortgage vs rent costs and joint applications insights
London affordability challenges and deposit timeframe estimates
Mortgage product innovations including low deposit and high income multiples