House prices have steadied and borrowing is getting cheaper, but big deposits, high rents and fragile finances mean buying a first home remains out of reach for millions
For much of the past decade, buying a first home in the UK has felt less like a milestone and more like a distant fantasy.
Rising house prices, sharp interest rate hikes and deposits that ballooned faster than wages pushed homeownership further out of reach — particularly for younger buyers and renters.
As 2026 unfolds, there are signs conditions may be less hostile than they were at the peak of the affordability crisis. Mortgage rates are falling, house price growth has slowed and lenders are cautiously loosening criteria.
But while the market may be thawing, experts warn this is not a return to “easy” homeownership — and for many first-time buyers, the financial barriers remain stubbornly high.
Reality Check: The numbers first-time buyers are facing in 2026
- Average UK house price: £270,000+
- Typical first-time buyer property price: £300,000+
- Average deposit: £60,000+
- Mortgage repayments: Around 32% of take-home pay
- Average first-time buyer age: Early to mid-30s
- Typical time to save a 10% deposit: Up to six years
Mortgage
One of the clearest improvements for buyers is the cost of borrowing.
Mortgage rates have eased from recent highs and now sit just below 5% for many fixed-rate deals. That has brought down monthly repayments compared with the worst of the cost-of-living crisis.
House prices have also stabilised. The average UK home costs just over £270,000, with analysts predicting modest price rises of around 2% to 4% during 2026 — far slower than the pandemic boom years.
That slower growth gives buyers more breathing space. But affordability remains tight. Even now, the typical first-time buyer spends roughly a third of their income on mortgage repayments, leaving limited financial cushion if bills rise or interest rates increase again.
Deposits are still the biggest roadblock
If mortgage costs are easing, deposit demands remain daunting.
The average first home costs more than £300,000, meaning buyers often need savings exceeding £60,000. In London and the South East, deposits frequently climb into six figures.
Saving that amount while renting is one of the biggest financial challenges facing young households. Many buyers now rely on family support, inheritance or joint purchasing simply to enter the market.
This is reflected in the age shift among buyers. Purchasing in your early thirties is now common — a significant change compared with previous generations.
Renting vs Buying: Is owning still cheaper long term?
Many first-time buyers are entering the housing market not because buying is easy — but because renting has become increasingly expensive.
Private rents have risen sharply in recent years, in some areas exceeding mortgage repayments for comparable properties.
Buying advantages:
- Builds long-term equity
- Offers more housing security
- Protects against rent inflation
Buying risks:
- Large upfront deposit
- Maintenance and repair costs
- Exposure to interest rate changes
Renting advantages:
- Flexibility to move
- Lower upfront costs
- No responsibility for repairs
Renting risks:
- No asset building
- Less stability
- Rising rental costs
For many households, the decision now comes down to financial stability rather than simple affordability.
Low-deposit mortgages help — but they come with risks
Some lenders have introduced mortgages requiring deposits as low as 2%, potentially allowing buyers to purchase with savings of around £10,000.
While these products can help renters break into the market, they carry higher risk. Buyers with very small deposits have little protection if house prices fall or if rates rise when fixed deals end.
Financial advisers warn these mortgages can be useful — but only when buyers have strong income stability and emergency savings.
Who is still being left behind?
Despite improving conditions, not all buyers are benefiting equally.
Those most likely to struggle include:
- Single buyers without dual incomes
- Renters without family financial support
- Buyers in London and the South East
- Younger workers in unstable or lower-paid sectors
Experts increasingly warn that homeownership risks becoming divided between those with access to financial support and those without.
What first-time buyers should realistically consider in 2026
Stress-test your finances Plan for possible rate increases or income changes.
Adjust expectations Many buyers are choosing smaller or less central properties as stepping stones.
Avoid rushing into deals A calmer market allows buyers to take time and compare options.
Seek expert advice early Mortgage brokers can identify deals suited to personal circumstances and help avoid long-term financial strain.
Expert view
“There is no doubt the market is less punishing than it was a couple of years ago, and that’s welcome news. But we shouldn’t pretend the problem is solved.
“For many first-time buyers, the challenge isn’t the mortgage — it’s the deposit and the lack of financial breathing space once they’ve bought. Buying a home can be the right move, but only if it genuinely improves your financial security rather than stretches it to breaking point.”
— Jasmine Birtles, founder of MoneyMagpie and MoneyMagpie Invest
So, is there hope — or just less pressure?
For first-time buyers in 2026, the reality sits somewhere in the middle.
Mortgage rates are falling. House price growth has slowed. Lenders are experimenting with new products designed to widen access to the market.
But deposits remain high, affordability is stretched and financial risk has not disappeared.
For some buyers, this year may finally offer a realistic route onto the property ladder. For many others, buying will still require compromise, patience and often outside support.
The housing ladder may no longer be moving rapidly out of reach — but for many hopeful homeowners, it is still standing frustratingly high.
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