Mortgage lenders forwarded a record £82.8bn of mortgage debt to 390,000 first time buyers in the year to September 2025, according to analysis by Savills. This is a 30% increase on the previous year.
Overall, first time buyer borrowing accounted for 20% of all spending in the UK housing market over the same period. This is the highest proportion since at least 2007, according to Savills analysis of data from the Bank of England, HMRC, the Land Registry and its counterparts in other parts of the UK.
“Record lending to first-time buyers partly reflects the rush to get things through prior to the end of the stamp duty holiday earlier in the year,” says Lucian Cook, head of residential research at Savills.
“At the same time, homeownership is more accessible now than at any point in the last three years, thanks to lower borrowing costs, lower real house prices, and more accessible mortgage debt. The FCA’s revised guidance on interpretation of mortgage regulation back in March, in particular, gave lenders more latitude to lend at higher loan to income and loan to value ratios, to the benefit of first-time buyers.”
Total housing market spend
The total size of the UK housing market expanded by 14% to £417 billion in year to September. Despite the sharp increase in activity, total spend is still some way below the record of £521bn in the year to September 2021, during the post lockdown mini housing market boom.
“Further interest rate cuts expected later this year are likely to broaden the pool of prospective buyers entering the market in 2026,” continues Lucian Cook, head of residential research at Savills. “The continued shortage of rental properties is set to keep first-time buyer demand strong going into the new year. Meanwhile, existing mortgage holders seeking to move home are also expected to become gradually more active, with falling rates enabling them to take on slightly larger loans and increase their budgets.”
Debt vs equity
The analysis shows that the balance between mortgage and deposit is slowly shifting for first-time buyers.
The amount put down by way of deposit among this group stood at £21.8bn in the year to September 2025 but it remained below the £25.9bn record four years previous (2021).
Nonetheless, the analysis shows that spending by an estimated 397,000 cash buyers at £147.6bn still accounts for the largest part of the market, albeit that has fallen by 3% over the course of the year.
