Low-Deposit Mortgages Soar to 22.1% Amid Affordability Challenges – Barclays

New insights from Barclays reveal a significant increase in UK First-Time Buyers securing lower-deposit mortgages. Deposits under £20,000 are increasingly common, now making up over a fifth of FTB completions in October, marking a notable rise from last year's figures. This trend underscores their persistent drive for homeownership despite challenging economic conditions. It also highlights a rising reliance on external support and innovative lending products, offering crucial context for Day-Rate Contractors, Self-Employed Directors, and complex-income borrowers. The report highlights both the obstacles and emerging solutions for aspiring homeowners across the UK.

Barclays' latest property insights reveal a notable shift, highlighting that deposits under £20,000 now represent 22.1% of first-time buyer completions in October, a substantial increase from 13.5% last year. This surge indicates a strategic move by FTBs to overcome cost-of-living pressures, demonstrating a strong commitment to getting on the property ladder. Such lower-deposit avenues, increasingly vital for individuals with less traditional income structures or those focused on preserving capital, are shaping the current mortgage landscape.

The report highlights a "growing appetite for external support," with nearly half of renters deeming homeownership impossible without a guarantor or family-backed mortgage. This, alongside 60% requiring support schemes, indicates crucial pathways for Day-Rate Contractors, Self-Employed, and those with complex finances. Barclays' recent increase in its maximum loan-to-income (LTI) to six times income further demonstrates the industry's commitment to providing vital flexibility, empowering more UK individuals to achieve their homeownership goals.

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