First-time buyers in London need a 10% deposit of around £44,800 to buy a typical home, more double the UK-average of £23,000 and over three times the amount required in parts of northern England or Scotland, according to Nationwide.

Buyers in the North East would typically need £13,100, while a 10% deposit in Scotland would be about £13,900 and in Yorkshire & the Humber £15,400.

At current saving rates of 10% of average net pay, around £320 a month, it would take nearly six years for a typical UK buyer to accumulate a 10% deposit of £23,000. In London, the same target would take about nine years, compared with four years in the North.

“Even based on saving 10% of average net pay, it would take a prospective buyer nearly six years to accumulate this,” said Andrew Harvey, Nationwide’s senior economist. “However, the level of deposit required also varies considerably by region, reflecting differences in average house prices.”

The high cost of deposits has meant many buyers continue to rely on family support. In 2024-25, over a third of first-time buyers received help from friends or family, either as a gift, loan, or inheritance. Some may also use Lifetime ISAs to boost savings, Nationwide said.

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Despite these hurdles, affordability has improved across much of the UK over the past year, supported by slower house price growth, stronger earnings, and falling mortgage rates. Nationwide said first-time buyers accounted for a higher than average share of house purchase activity, with high loan-to-value lending at its highest level for more than a decade. Activity was about 20% higher than in 2024.

Nationwide’s main affordability benchmark shows that a buyer on the average UK income purchasing a typical first-time buyer property with a 20% deposit would face monthly mortgage payments equal to 32% of take-home pay, slightly above the long-run average of 30% but well below the 48% peak recorded in 1989. The first-time buyer house price-to-earnings ratio improved to 4.7, slightly below its 20-year average.

Affordability also varies sharply by occupation. Mortgage payments relative to take-home pay are lowest for managerial and professional roles and most stretched for workers in sales, customer service, or elementary occupations such as construction and manufacturing labourers, cleaners and couriers, where payments can consume around 50% of income.

Regionally, London recorded the largest improvement in affordability for the second year running, helped by weak price growth and lower interest rates, though it remains the least affordable region.

Northern Ireland saw deterioration, while mortgage costs relative to income are now slightly below long-run averages in the North, Yorkshire & the Humber, and Scotland. London continues to have the highest house price to earnings ratio at 7.5, while Scotland has the lowest at 2.9.

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Separate data from Barclays (BARC.L) suggests that traditional barriers to homeownership are gradually easing. In December 2025, 22% of first-time buyers purchased homes with deposits under £20,000, up from 13% a year earlier, while 44% opted for 85-90% loan-to-value mortgages, compared with 41% the previous year.

The shift towards smaller deposits and higher LTVs has been accompanied by consistent demand for more affordable properties, particularly those under £300,000, which accounted for around two-thirds of first-time buyer purchases in December.

The changes are also driving optimism among younger buyers. Barclays found that 34% of Gen Z adults aspire to buy a new or first home in 2026, more than double the national average, with nearly six in 10 having already saved what they consider a significant deposit. Reliance on the “bank of mum and dad” appears to be easing, with 43% of Gen Z citing financial help as essential, down from 63% at the start of 2025.

“Confidence in the housing market is beginning to stabilise, despite ongoing affordability pressures,” said Jatin Patel, head of mortgages, savings and insurance at Barclays. “Younger buyers, particularly Gen Z, are highly motivated to get on the property ladder and lenders are helping to meet this demand by providing innovative products that increase how much customers can borrow.”

Nationwide said housing market activity was likely to strengthen modestly as income growth continues to outpace house prices and interest rates edge lower.

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