First-time purchaser affordability is being stretched additional as elevated borrowing shouldn’t be holding pace with home prices, new information from Acre counsel.
The mortgage platform’s evaluation of 14m affordability searches within the first half of 2025, present that first-time buyers are borrowing a median of £240,299, up by 5% on 2024 after they borrowed a median of £227,717.
This is regardless of the rise in home prices of 6.7%, based on the Office for National Statistics information for May.
This means their loan-to-value ratios are falling, though there are important regional variations.
Acre’s evaluation additionally exhibits that interest-only debtors are taking out increased loans at a median of £343,000, than these selecting reimbursement, the place the typical is £238,000.
Today’s figures additionally present a big North-South divide in how far first-time buyers are extending themselves.
The highest loan-to-income figures are present in London and the South East the place prices are highest, but there are additional rural and small city pockets like Harrogate, Wick, Orkney, Falkirk, Shrewsbury and Powys that at the moment are notably costly versus incomes in comparison with surrounding areas.
Acre chief govt Justus Brown says: “Our findings lay out the crippling affordability challenges confronted by many first-time buyers, being pressured to borrow more, notably in areas with a robust jobs market and in rising costly rural areas.
“Brokers are continually navigating these uneven affordability waters for his or her shoppers, geared up with the accountability of securing the best-suited mortgage with out placing any undue stress on them.”
