Entry-Level Ownership Obstacles Persist Amid Lending Slowdown
First-time buyers still face pressure from reduced choice and affordability challenges, even though mortgage turmoil eased in April, according to Moneyfacts’ latest UK Mortgage Trends Treasury Report.
It found that mortgage product choice contracted by around 10% since the start of March and higher loan-to-value deals (10% or less deposit or equity), typically used by first-time buyers, have fallen by 14%.
Although overall product choice seemed healthy, up by 583 options in the month, this represented less than half of the deals (1,283) lost in the previous month as lenders pulled products due to interest rate uncertainty.
Product churn calmed
Moneyfacts found that mortgage product churn calmed, with the average shelf-life of a deal doubling from eight to 16 days.
Since the start of April, the average two-year fixed rate fell by 0.06%, and the average five-year fell by 0.07%, to 5.78% and 5.68%. However, these rates are higher than the beginning of March, when they stood at 4.84% and 4.96%, respectively.
The Moneyfacts Average Mortgage Rate fell for the first time (month-on-month) since January 2026, to 5.66%, but is still more than the start of March’s 4.90% rate. Meanwhile, average two- and five-year fixed rates at 95% loan-to-value (LTV) remain above 6%.
Fixed rates are still lower than the average ‘revert to’ rate or Standard Variable Rate (SVR), with the average SVR 7.13%, down by 0.45% year-on-year from 7.58%.
First-time buyers bear the brunt
Rachel Springall, finance expert at Moneyfacts, said: “Borrowers may feel partially relieved by the period of calm after absolute mortgage mayhem, but first-time buyers bear the brunt.
“First-time buyers will be frustrated to see the choice of higher loan-to-value (LTV) options drop by 14% since the start of March (90%, 95% and 100% LTV) and those with little equity of just 5% hoping to grab a two- or five-year fixed deal will find average fixed rates remain above 6%. It is essential that new buyers in particular feel supported, to keep the market moving, but affordability strains are evident.”
Mary-Lou Press, president of NAEA Propertymark (National Association of Estate Agents), agreed that first-time buyers are still challenged. “While the mortgage market has calmed slightly after recent volatility, first-time buyers are still facing significant pressure. Rates have eased marginally, but affordability remains stretched, particularly for those with smaller deposits.
“There is still a clear need for more support for first-time buyers through greater lender innovation, competitive high loan-to-value products and improved housing affordability. For borrowers navigating the current environment, taking professional mortgage advice remains crucial as financial criteria and lender appetite continue to shift.”
