The most striking development is the explosion in available mortgage products. According to the latest Moneyfacts UK Mortgage Trends Treasury Report, borrowers now have access to 7,537 mortgage deals - over 1,000 more than a year ago and the highest number since October 2007.
Even more significantly for first-time buyers, the number of high loan-to-value (LTV) mortgages has surged. There are now 927 products available at 90% LTV (requiring just a 10% deposit) - a record high. Meanwhile, 95% LTV deals, which need only a 5% deposit, have reached their highest count since March 2008, with 489 products now available.
Rachel Springall, Finance Expert at Moneyfacts, commented: "This year is setting itself up to be a fruitful one for first-time buyers, and really, they need all the help they can get amid the lack of affordable housing."
Lenders Easing Affordability Tests
Perhaps the most significant shift has been in how lenders assess affordability. Following guidance from the Financial Conduct Authority in March 2025, lenders have been reminded of the flexibility they have when applying interest rate stress tests to mortgage applications.
The result? Many lenders can now offer around £30,000 more to borrowers than they could previously, according to the FCA. This change has been transformative for first-time buyers who were previously falling just short of qualifying for their desired property.
Major lenders have also increased their loan-to-income multiples. Nationwide, for example, now lends up to six times income to remortgage customers or those moving home, up to 95% LTV. This represents a significant relaxation from the traditional 4.5 times income cap that has been standard for years.
Falling Deposit Requirements
Data from major lenders shows a clear trend: deposits are getting smaller. In December 2025, over one in five (22%) first-time buyers put down deposits of less than £20,000, up from just 13% the previous year.
The average deposit for first-time buyers dropped by 14% year-on-year, suggesting both greater availability of high-LTV products and increased willingness from lenders to accept higher loan-to-value ratios. In December, 44% of first-time buyers chose mortgages with an 85-90% LTV ratio, up from 41% the year before.
Improving Affordability Despite High Prices
While house prices remain elevated - with the average UK home exceeding £300,000 for the first time in January 2026 - affordability is actually improving in real terms. The house price to income ratio was at its lowest in over a decade in December, according to Halifax, striking a positive note for prospective buyers.
This improvement is being driven by several factors: wage growth is outpacing house price growth, mortgage rates have fallen significantly from their 2023 peaks, and lenders are offering more flexible terms including longer mortgage periods and higher income multiples.
Confidence Rising Among Young Buyers
The positive market conditions are reflected in buyer sentiment. Research from Barclays shows that confidence among 18-34-year-olds rose from 33% in January 2025 to 40% in December. Generation Z buyers are now twice as likely as the average buyer to aim for a 2026 purchase.
These young savers are also showing impressive financial discipline. Gen Z savers report having accumulated an average of £19,442 in deposits (excluding financial assistance), and they expect to add an additional £8,998 to their savings this year.
What This Means for Northern Ireland Buyers
The trends affecting the UK market are equally relevant for buyers in Northern Ireland. With mortgage product choice at an 18-year high and lenders competing aggressively for business, Northern Ireland first-time buyers have access to more options and better rates than at any point in recent memory.
The combination of relaxed stress testing, higher income multiples, and the availability of 95% LTV products means that many who thought homeownership was out of reach may now find it achievable.
The Challenges That Remain
Higher Rates Than Pre-2020
Mortgage rates, while much lower than in 2023, remain significantly higher than the ultra-low rates available in the early 2020s. Many first-time buyers will still need financial help from family members to raise their deposits.
Housing Supply Shortage
The chronic shortage of affordable housing supply means that even with improved access to mortgages, competition for suitable properties remains fierce, particularly in high-demand areas.
Expert Advice: Act Now
With market conditions as favourable as they've been in years, experts are advising aspiring first-time buyers to take action sooner rather than later. The mortgage market can change quickly, and the current combination of product choice, competitive rates, and relaxed lending criteria may not last indefinitely.
For those considering taking the plunge in 2026, the key steps are:
- Get your finances in order and improve your credit score
- Save as much deposit as possible to access better rates
- Speak to a qualified mortgage adviser who can help you navigate the wide range of options now available
If you're a first-time buyer looking to take advantage of the improving market conditions, our team at Mortgages Northern Ireland can help you find the right mortgage for your circumstances. With access to the full market and expert knowledge of the latest lending criteria, we're here to help make your homeownership dreams a reality. Call us on 0330 043 0327 or visit our website for a free, no-obligation consultation.
