Selecting the correct mortgage can help, but the first rung of the property ladder may feel more like a leap than a step and a half
Getting the keys to your first house is an unforgettable experience, but moving up the property ladder is not simple. Official figures show that the average home in the UK now costs 269,000, with inner-city homes frequently costing even more. 1.
Additionally, the cost of living has increased dramatically in recent years, making it more challenging for potential buyers to save a deposit. Because housing costs and other necessities take up the majority of their monthly income, those who are trying to save while renting face unique obstacles.
According to Zoopla, a website that lists properties, the average annual cost of renting has increased by 21% during the last three years. This April, two bills also went up. For instance, in the majority of English local authorities, the average council tax bill increased by nearly 5% annually, while the average water bill increased by 123 percent annually. 4. .
It should come as no surprise that first-time homebuyers are heavily depending on family members for support given the high cost of living. The most recent government housing survey shows that 31% of first-time homebuyers in 2023 - 2024 received financial assistance from friends or family. Nine percent more drew their deposits from an inheritance.
Selecting the appropriate mortgage.
Although not everyone's family can assist, there are things that buyers can do on their own. Selecting the ideal mortgage is especially crucial.
If your relatives wish to help but are unable to give you cash for a down payment, the Lloyds Lend a Hand Mortgage might be a suitable choice. This enables a family member to secure a three-year fixed-term savings account with 10% of the purchase price of the property. They will get their money back in three years with interest if you make your repayments on time. The interest rate on your mortgage will be fixed for three years to help provide you with stability, and there is no need for an additional deposit. It will be your houseand your house only. You will be the sole owner of the property and the only name on the mortgage.
There are certain requirements, such as the requirement that you or a family member have a Club Lloyds account prior to applying. It is not possible to use the mortgage to buy a new home; you must be a first-time buyer who lives in England or Wales. Applicants for loans up to £500,000 are welcome.
You might be eligible for a discount on your initial mortgage rate if you are a Club Lloyds customer. Club Lloyds may have a five-month fee, and there are exclusions. A complete mortgage application is also required before lending can occur.
The Lloyds First-Time Buyer Boost Mortgage is another program that might be worthwhile to take into account. You might be able to borrow up to 22% more than you normally would thanks to this.
A deposit of at least 10% is required to be eligible, and the combined household income of all applicants must be at least £50,000. All applicants must work for a third party rather than for themselves, and at least one applicant must have never owned real estate before.
Regardless of the product you choose, always carefully consider the costs and charges. The financial data firm Moneyfacts reports that the average mortgage rate is currently 5 percent. 5.
The decision to lend will be based on an evaluation of your situation, just like with any other mortgage application.
Government programs for first-time purchasers.
The government may also be able to assist; it's not just your bank and your family.
One of the most well-liked savings options for first-time purchasers is a Lifetime ISA. This kind of account allows you to deposit up to £4,000 annually and receive a 25 percent government bonus, which can total up to £1,000 annually.
Although Lloyds does not offer Lifetime ISAs, you can use one from another provider when you buy a home and have a Lloyds mortgage.
Make sure to carefully read the terms and conditions that come with lifetime ISAs. Withdrawing funds for retirement or a first home purchase up to £450,000 will result in penalties.
There are other government initiatives that might help you further. These include programs like Forces Help to Buy, shared ownership, and the Right to Buy initiative. Lloyds can also support your mortgage application if you opened a Help to Buy ISA prior to the scheme's closure.
What was the maximum amount you might borrow?
Use Lloyds' online mortgage calculator to quickly determine how much you could borrow and what your monthly repayments might be before you start looking for a home.
Applying for a principle agreement is the next step. Your credit score is unaffected, and the procedure only takes fifteen minutes. You can use the web chat feature to ask any questions you may have while completing the online process with a Lloyds mortgage specialist. 6.
You can show estate agents that you are prepared to make an offer on your ideal home by presenting them with an agreement in principle, though it does not provide any guarantees. A complete mortgage application will then need to be filled out if you choose to move forward.
Exclusions and terms and conditions apply to this product.
Every loan is conditional. If you don't make your mortgage payments, you risk losing your house.
Notes in the foot.
1 Source: The house price index from the HM Land Registry. The information pertains to May and was extracted from the official report that was released on July 16, 2025.
2 Source: Zoopla Rental Market Report, released on June 11, 2025.
Ofwat and Water UK are the third source. The 123 number is the average yearly increase in bills as of April 2025.
4 Source: Ministry of Local Government, Communities, and Housing.
Five Source: Moneyfacts, July 25, 2025.
6 Web chat is open Monday through Friday from 8 a.m. to 9 p.m.; on Saturday from 9 a.m. to 6 p.m.; and on Sunday from 10 a.m. to 6 p.m. The hours of operation are accurate as of June 27, 2025.
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