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Building societies work hard to help first-time buyers

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Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert 01603 476210 Email Rachel
03/06/2025

Building societies work hard to help first-time buyers

Building societies are working hard to help first-time buyers get onto the property ladder, but more needs to be done to support new buyers across the spectrum. Moneyfactscompare.co.uk reveals the availability and pricing of deals for new buyers with small deposits.

Building societies work hard to help first-time buyers

Building societies are working hard to help first-time buyers get onto the property ladder, but more needs to be done to support new buyers across the spectrum. Moneyfactscompare.co.uk reveals the availability and pricing of deals for new buyers with small deposits.

  • According to The Building Societies Association (BSA), two-thirds of first-time buyers said mortgage affordability is the biggest barrier to buying a home (65%). Raising a deposit was also highlighted as a significant obstacle to homeownership by 62% of would-be homebuyers.
  • First-time buyers comparing mortgages will find building societies on average price lower than the market averages (90% and 95% loan-to-value, for two- and five-year fixed mortgages).
  • Out of the seven biggest high street banks, the average rates combined are lower than building societies’ (90% and 95% loan-to-value, for two- and five-year fixed mortgages for first-time buyers), but the lowest rate deals might not be the best on a true cost basis.
  • According to The Building Societies Association (BSA), two-thirds of first-time buyers said mortgage affordability is the biggest barrier to buying a home (65%). Raising a deposit was also highlighted as a significant obstacle to homeownership by 62% of would-be homebuyers.
  • First-time buyers comparing mortgages will find building societies on average price lower than the market averages (90% and 95% loan-to-value, for two- and five-year fixed mortgages).
  • Out of the seven biggest high street banks, the average rates combined are lower than building societies’ (90% and 95% loan-to-value, for two- and five-year fixed mortgages for first-time buyers), but the lowest rate deals might not be the best on a true cost basis.

 

Moneyfacts mortgage market analysis of deals available to first-time buyers

Average fixed rates and product counts

All lenders

Building societies

Barclays, Halifax, HSBC, Lloyds Bank, NatWest, RBS and Santander

Average two-year fixed rate at 90% LTV

5.50%

5.20%

4.70%

Average two-year fixed rate at 95% LTV

5.61%

5.41%

5.06%

Average five-year fixed rate at 90% LTV

5.33%

5.01%

4.61%

Average five-year fixed rate at 95% LTV

5.53%

5.29%

4.98%

Two-year fixed deals at 90% LTV

206

61

31

Two-year fixed deals at 95% LTV

122

48

16

Five-year fixed deals at 90% LTV

234

64

30

Five-year fixed deals at 95% LTV

148

57

17

Data correct as at 30.5.25. Deals shown are available to first-time buyers, but not exclusive to them, deals exclude adverse credit options. NatWest includes deals through its intermediary arm. Source: Moneyfactscompare.co.uk

 

 

Moneyfacts mortgage market analysis of deals available to first-time buyers

Average fixed rates and product counts

All lenders

Building societies

Barclays, Halifax, HSBC, Lloyds Bank, NatWest, RBS and Santander

Average two-year fixed rate at 90% LTV

5.50%

5.20%

4.70%

Average two-year fixed rate at 95% LTV

5.61%

5.41%

5.06%

Average five-year fixed rate at 90% LTV

5.33%

5.01%

4.61%

Average five-year fixed rate at 95% LTV

5.53%

5.29%

4.98%

Two-year fixed deals at 90% LTV

206

61

31

Two-year fixed deals at 95% LTV

122

48

16

Five-year fixed deals at 90% LTV

234

64

30

Five-year fixed deals at 95% LTV

148

57

17

Data correct as at 30.5.25. Deals shown are available to first-time buyers, but not exclusive to them, deals exclude adverse credit options. NatWest includes deals through its intermediary arm. Source: Moneyfactscompare.co.uk

 

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:

“Mortgage affordability remains a key issue among first-time buyers, who may be struggling to see how they can make their homeownership dreams a reality. The Government needs to propel its homebuilding plans, or we could be set for a rise in house prices. The good news is that mortgage rates have been coming down and this can give buyers more of a chance to secure a deal. Building societies are working hard to support new buyers, with two- or five-year fixed rate deals available to first-time buyers with a 5% or 10% deposit charging less on average compared to the market average in the same space. However, the biggest banks traditionally have more margin to price their mortgages lower, which is why they are undercutting the mutuals. Indeed, seven banks (Barclays, Halifax, HSBC, Lloyds Bank, NatWest, RBS and Santander) are priced lower, on average. Despite this, mutuals can tailor their ranges to provide best choice for those with small deposits when all the costs and incentives associated with the mortgage are included. Mutuals can also be more driven to create innovating products, such as the Track Record Mortgage from Skipton Building Society.

“It has now been more than a decade since the current loan-to-income (LTI) rules came in play and many mutuals have been calling for these to be relaxed to give them more scope to lend more to first-time buyers. At present, banks and building societies can do no more than 15% of their total qualifying loans. However, lenders have been given a nod to review their stress testing rules, with some of the biggest brands making changes over the past few months. This is a positive step if taken with care, to ensure borrowers are being supported, but most importantly feel protected. This month the Financial Conduct Authority (FCA) is expected to open a public discussion on the future of the mortgage market, so it will be interesting to see what transpires. Those borrowers who have exhausted their savings will need to consider ways of securing a mortgage, such as lengthening the term of their deal. According to UK Finance, the average first-time buyer mortgage term is now 31 years as of March, compared with 28 years a decade ago. The right choice of deal and term will come down to the individual, so it is imperative borrowers seek independent advice before they commit.”

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:

“Mortgage affordability remains a key issue among first-time buyers, who may be struggling to see how they can make their homeownership dreams a reality. The Government needs to propel its homebuilding plans, or we could be set for a rise in house prices. The good news is that mortgage rates have been coming down and this can give buyers more of a chance to secure a deal. Building societies are working hard to support new buyers, with two- or five-year fixed rate deals available to first-time buyers with a 5% or 10% deposit charging less on average compared to the market average in the same space. However, the biggest banks traditionally have more margin to price their mortgages lower, which is why they are undercutting the mutuals. Indeed, seven banks (Barclays, Halifax, HSBC, Lloyds Bank, NatWest, RBS and Santander) are priced lower, on average. Despite this, mutuals can tailor their ranges to provide best choice for those with small deposits when all the costs and incentives associated with the mortgage are included. Mutuals can also be more driven to create innovating products, such as the Track Record Mortgage from Skipton Building Society.

“It has now been more than a decade since the current loan-to-income (LTI) rules came in play and many mutuals have been calling for these to be relaxed to give them more scope to lend more to first-time buyers. At present, banks and building societies can do no more than 15% of their total qualifying loans. However, lenders have been given a nod to review their stress testing rules, with some of the biggest brands making changes over the past few months. This is a positive step if taken with care, to ensure borrowers are being supported, but most importantly feel protected. This month the Financial Conduct Authority (FCA) is expected to open a public discussion on the future of the mortgage market, so it will be interesting to see what transpires. Those borrowers who have exhausted their savings will need to consider ways of securing a mortgage, such as lengthening the term of their deal. According to UK Finance, the average first-time buyer mortgage term is now 31 years as of March, compared with 28 years a decade ago. The right choice of deal and term will come down to the individual, so it is imperative borrowers seek independent advice before they commit.”

Notes to editors

You are welcome to use part or all of this press release, so long as we are sufficiently sourced. We would appreciate a link back to Moneyfactscompare.co.uk.

Pioneering financial comparison technology for over 35 years, Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

Notes to editors

You are welcome to use part or all of this press release, so long as we are sufficiently sourced. We would appreciate a link back to Moneyfactscompare.co.uk.

Pioneering financial comparison technology for over 35 years, Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

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Rachel Springall Press Officer / Finance Expert
Caitlyn Eastell Press & PR Executive