Half of all first-time buyers are taking out mortgages at 90% loan-to-value or higher, with one in seven now borrowing above 95%, according to new data from fintech firm Armalytix.
The findings underline the growing financial strain on those entering the housing market and highlight a widening divide between first-time buyers and existing homeowners.
By comparison, only 22.6% of repeat buyers take on mortgages above 90%, suggesting that the market is becoming increasingly two-tiered, with first-time buyers bearing the greatest financial risk.
Family support remains central to getting on the property ladder. Armalytix found that one in four high-LTV first-time buyers received a family gift — typically around £10,000 — but this is often not enough to reduce borrowing to a lower LTV band or qualify for better mortgage rates.
Among those borrowing less, family help tends to be more substantial. Around 36% of lower-LTV first-time buyers received gifts averaging £30,000, a sum that can make a tangible difference to the affordability of their mortgage and the stress of repayment.
Mike Ward, chairman at Armalytix, said: “High LTV has become the new normal for first-time buyers. While government schemes like the Lifetime ISA or Help to Buy ISA certainly help, family gifts increasingly determine who can move forward and who remains stretched. Those with larger family backing move ahead, while others face higher costs and greater risk.”
LIMITED GOVERNMENT SUPPORT
The firm’s research also shows that take-up of government schemes remains limited. Only 32% of eligible first-time buyers used a government ISA this year, suggesting that family assistance has a more decisive impact on purchasing power.
Repeat buyers are generally less reliant on gifts, but when they do receive financial help, it represents a greater proportion of the purchase price. The average contribution for non-first-time buyers was 25.8% of the property’s value, compared with just 13.1% among first-time buyers, reflecting the benefits of equity recycling and intergenerational wealth transfer.
Armalytix said the data illustrates how affordability pressures are shaping buyer behaviour and increasing exposure to risk.
“First-time buyers are navigating a high-pressure market with limited room for error,” Ward added. “Understanding the role of family support, government schemes, and borrowing risks is crucial for anyone advising or lending in this market. Our analysis helps professionals make informed decisions quickly, reducing risk and improving outcomes for buyers.”
