More low-deposit mortgage deals available

For many first-time buyers, raising a deposit is the biggest hurdle to owning their own home.

But for those who can save up 5% of the property's price, the good news is that the market appears to be opening up.

There are now more 95% mortgages available than at any point in the past two years, according to data from financial information site Moneyfacts.

As of the start of July there were 361 mortgages on the market at 95% loan-to-value (LTV), the highest number recorded since May 2022.

10% deposit

Lenders usually ask for a minimum deposit of 5%, and these deals tend to come with the highest rates. This means that borrowers with a bigger deposit could make significant savings on their monthly repayments.

According to consumer group Which?, the cheapest rate available on 95% mortgage deals is currently around half a percentage point higher than on the equivalent 90% LTV deal.

Although the number of deals for those with a 10% deposit has remained steady at 792, Moneyfacts noted that there are still many more available than one year ago when there were just 525 of these products on the market.

Across the whole of the market, the number of mortgage products available increased to 6,658 at the start of July, the highest since February 2008.

By contrast, in July 2023 lenders were offering a total of just 4,396 mortgage products.

Average mortgage shelf-life doubles

As well as having more deals to choose from, borrowers also now have longer to secure a mortgage. The average shelf-life of a mortgage deal is 30 days, up from 15 days in June and just 13 days a year ago.

With deals now available for longer before being withdrawn or repriced, this could indicate that the mortgage market is improving for borrowers, Moneyfacts said.

"One notable difference month-on-month has been a return to the stability in the shelf-life of a mortgage deal," commented Rachel Springall, finance expert at Moneyfacts.

"Lenders have been repricing their deals in response to volatile swap rates, which calmed during June," Springall explained.

Affordability still 'stretched'

UK house prices are relatively stable at the moment, with the latest monthly reports from both Nationwide and Halifax showing that prices have risen slightly over the past 12 months.

However, while house price growth has been overtaken by earnings growth in recent years, this hasn't been enough to offset the impact of higher mortgage rates, which are still well above the record lows seen in 2021 in the wake of the pandemic, according to Robert Gardner, chief economist at Nationwide.

Gardner added that, as a result, housing affordability in the UK remains "stretched".

Average age of first-time buyers

The struggle faced by young people to get on the property ladder is reflected in the current average age of a first-time buyer.

Analysing its own records for the past two years, online mortgage broker Mojo Mortgages found that the national average age of a first-time buyer in the UK is 33 years and 8 months.

With significantly higher house prices in much of the capital, Londoners join the property ladder the latest in life -- averaging 36 years and 8 months.

Meanwhile, first-time buyers in Wales tend to join the property ladder earliest in life, averaging 31 years old.

UK-wide, the average mortgage term that a first-time buyer chooses is 30 years.

As a result, the average buyer isn't expected to be mortgage-free until they are 63 years and 8 months old -- and in London this surpasses the current retirement age at 66 years and 8 months.