A 17-Year High: Low-Deposit Mortgage Deals Dominate the 2025 Market

2025: A Breakthrough Year for Contractors Seeking Homeownership

Contractors, if homeownership has felt out of reach due to large deposit requirements, 2025 could be your breakthrough year. For the first time since 2008, the number of mortgage products available with just a 5% or 10% deposit has surged, offering more opportunities for first-time buyers and self-employed professionals.

As of early 2025, the number of mortgage deals requiring just a 5% deposit has risen dramatically to 442, compared to only 204 two years ago. For those with a 10% deposit, available deals have increased to 845 from 684 in April 2023. This expansion signals growing lender confidence and heightened competition, even though mortgage rates overall remain on the higher side.

This renewed accessibility is a huge boost for contractors and first-time buyers who have faced challenges saving during a period marked by soaring rents, rising living costs, and stubborn inflation.

However, speed remains critical. Data from Zoopla reveals that homes in England and Wales now spend an average of just 36 days on the market before an offer is agreed, and for two-bedroom properties, a popular choice among first-time buyers, it’s even faster at 23 days. Having your mortgage arrangements in place early could mean the difference between securing your ideal home or missing out, particularly for contractors who may require extra time to organise income documentation or lender approvals.

To help contractors navigate this competitive environment, Contractor Mortgage Solutions offers a specialist "How Much Can I Borrow?" tool. This tool factors in your day rate, contract length, and total income, avoiding outdated salaried assumptions, and provides quick, clear insights to strengthen your position before entering the housing market.

Industry Experts Welcome Growth but Urge Caution

Industry experts are welcoming the growth in mortgage products but advise caution. Rachel Springall, mortgage expert at Moneyfacts, states:

"A rise in product availability for aspiring homeowners is a healthy step in the right direction.”

Concerns Over Low-Deposit Mortgages

Despite the improvement, only 6% of all available mortgages cater to those with a 5% deposit. Affordability and accessibility for a broader range of buyers, especially contractors with complex income profiles, still need progress. Additionally, interest rates remain a hurdle: low-deposit borrowers typically face rates above 5%, whereas those with a 40% deposit can access rates under 5%. This highlights the critical importance of financial planning and exploring all available options before committing.

Geographic Shifts in the Housing Market

Zoopla’s latest market data also identifies a geographic shift. Homes in the North of England are generally selling faster than those in the South, thanks to lower house prices and strong demand. In particular, Manchester and London’s Waltham Forest are two of the fastest-moving markets, with homes averaging just 19 days on the market before a sale is agreed.

Pricing Strategies Remain Crucial

Given this dynamic market, buyers and sellers alike are urged to work closely with estate agents to ensure asking prices remain realistic. There are more properties available compared to last year, meaning pricing strategies need to be spot-on.

Golden Opportunity for Contractors in 2025

For contractors, 2025 presents a golden opportunity to get on the property ladder with a low deposit, but success hinges on strategic preparation. Traditional banks often misunderstand contractor income using outdated metrics. Contractor Mortgage Solutions specialises in helping contractors and self-employed professionals navigate the mortgage process confidently, ensuring their true earning potential is properly represented to lenders.