In the 12 months to May 2024, the average rent in England was £1,301 according to figures from ONS – an increase of 8.6% on the previous year. In London alone, rents increased by 10.1% over the same period, while the North East saw the amount tenants handed over to landlords go up by 6.1%.
With the average household paying almost 10% more in rent this year versus last, it’s easy to see why getting onto the property ladder holds so much appeal. Yet statistics show that first time buyer purchases were down 21% in 2023 versus 2022, and that the average first time buyer in England is now 34 years old.
What help is there for first time buyers in England?
There are a range of schemes to help first time buyers in England to afford their first home. These include Deposit Unlock, and Shared Ownership. Another option is to look at mortgages that offer preferential rates to first time buyers. This is the route we’re going to focus on in this blog.
Which lenders offer first time buyer mortgages?
At the time of writing, three lenders in England are offering specific mortgage products for first time buyers. These include Halifax, Nationwide, and Accord.
We’ve briefly summarised each mortgage product below:
Halifax First Time Buyer Boost: Best mortgage for solo & joint first time buyers
- What is it?
Up to 5.5x loan to income (LTI) for eligible applicants, meaning first time buyers could loan up to 22% more than their income would normally allow. - Who can apply?
To be eligible, at least one person on the mortgage application will need to be a first time buyer. This means you could still qualify if you’ve owned before but your partner hasn’t. You will need a total income of £50,000 and the loan to value (the amount you’re looking to borrow) would need to be 90% or less. Meaning you’d need at least a 10% deposit. - Are there any conditions?
Yes. First Time Buyer Boost isn’t available on schemes like Shared Equity or Shared Ownership. Neither is it eligible to self-employed applicants. Your credit score will also be taken into consideration and may reduce the LTI boost offered.
Accord Boost LTI ( Loan To Income): Best mortgage for higher earners & repeat buyers
- What is it?
Similar to Halifax’s First Time Buyer Boost, Accord will offer an increased LTI ( Loan To Income) of between 5-5.5x for home buyers who qualify for the scheme. - Who is eligible?
Accord Boost LTI is open to a range of applicants, including first time buyers, home movers, new build buyers, and those looking to remortgage on their existing home. - Are there any conditions?
Yes. To qualify you will need a household income of at least £60,000 and an LTV of no more than 90%. You will also need to meet Accord’s standard lending criteria. In addition, the product cannot be combined with any other offer.
Nationwide Helping Hand: Best mortgage for first time buyers with a low income and a small deposit
- What is it?
Up to 6 x Loan To Income (LTI) – Nationwide Helping Hand offers eligible first time buyers up to 33% more than their usual household earnings would qualify them for on loans of up to 95% LTV. - Who is eligible?
Unlike Accord, Nationwide’s Helping Hand mortgages are only open to first time buyers. - Are there any conditions?
Yes. As well as only first time buyers being eligible, the Helping Hand LTI boost only applies on fixed rate products with an initial term of five or ten years. The maximum loan to value available is 95%, meaning you’ll need to be able to offer a deposit of at least 5%. Self-employed applicants aren’t eligible; however, solo applicants will only need £30,000 in income while joint applicants will require £50,000. Finally, the product isn’t eligible if you’re buying through a property-buying scheme such as Deposit Unlock, Shared Ownership, or Help to Buy.
How can I apply for a first time buyer mortgage?
You can either approach a lender individually or you use a mortgage broker, such as those that sit on our Threshold team.
What are the benefits of using a mortgage broker?
- Using a mortgage broker means you’ll only need to supply all of your financial information once (versus having to repeat the process with each lender for each new application you want to make).
- Mortgage brokers also have access to rates that aren’t offered to buyers directly and with just one application we can search hundreds of products across a variety of lenders to find you the most competitive deal. Even better, this process won’t affect your credit score.
- We don’t charge you for our services, so it won’t cost you a penny just to call up and find out how much you could borrow and at what rate of interest. We can get you a decision in principle with your chosen lender in minutes, putting you in a position to make an offer straightaway if you view a property you love.
Whilst these lenders may be able to help First Time Buyers get on the ladder, as brokers we will assess your individual needs and circumstances and compare your options across a wide variety of lenders.
So, what have you got to lose? Find out if you can make your homeowner dream a reality by booking an appointment to speak to our Threshold mortgage team for free.
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