First-time purchaser affordability is being stretched additional as elevated borrowing is not keeping tempo with house costs, new knowledge from Acre recommend.
The mortgage platform’s evaluation of 14m affordability searches within the first half of 2025, present that first-time patrons are borrowing a mean of £240,299, up by 5% on 2024 once they borrowed a mean of £227,717.
This is regardless of the rise in house costs of 6.7%, in keeping with the Office for National Statistics knowledge for May.
This means their loan-to-value ratios are falling, though there are vital regional variations.
Acre’s evaluation additionally reveals that interest-only debtors are taking out larger loans at a mean of £343,000, than these selecting compensation, the place the common is £238,000.
Today’s figures additionally present a big North-South divide in how far first-time patrons are extending themselves.
The highest loan-to-income figures are present in London and the South East the place costs are highest, however there are additional rural and small city pockets like Harrogate, Wick, Orkney, Falkirk, Shrewsbury and Powys that are actually notably costly versus incomes in comparison with surrounding areas.
Acre chief government Justus Brown says: “Our findings lay out the crippling affordability challenges confronted by many first-time patrons, being compelled to borrow extra, notably in areas with a robust jobs market and in rising costly rural places.
“Brokers are always navigating these uneven affordability waters for his or her purchasers, geared up with the duty of securing the best-suited mortgage with out placing any undue strain on them.”
