22.1% of first-time buyers in the UK are now purchasing homes with deposits under £20,000, reflecting a sharp rise from just 13.5% last year. Barclays’ latest report highlights how buyers are overcoming cost-of-living pressures by taking out low-deposit mortgages, often supported by family-backed guarantees or government schemes. While overall housing market confidence has dipped, the appetite for homeownership remains strong, emphasising the importance of timely mortgage planning.
Low-Deposit Mortgages on the Rise
Deposits under £20,000 accounted for 22.1% of first-time buyer completions in October, up from 13.5% in the same period last year. Many households are relying on support from guarantors or family-backed mortgages, with 49% of renters saying they could not buy without external help. The trend is further supported by financial incentives and homebuying schemes, which six in ten potential buyers now say they require.
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Market Confidence Softens Amid Cost Pressures
Despite positive sentiment towards household finances remaining at 63%, confidence in the UK housing market fell to 24% in October — the lowest since January. Rising living costs, the challenge of saving for a deposit, and high rents are the primary concerns for renters. Homeowners, however, remain relatively optimistic, citing manageable housing costs and security of income as key reasons for confidence in moving home.
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