The recent wave of low and no-deposit mortgages is a welcome sign that lenders are listening to first-time buyers. Products requiring £5,000, 2% or even no deposit could bring a purchase forward by years for eligible borrowers.
Having directed the government’s Help to Buy: Equity Loan scheme in England, I have seen both the impact of well-designed support and the gaps that remain for financially capable homebuyers unable to save a deposit while paying high rents and living costs. That experience underpins my work at Own Homes.
Product innovation on its own won't close Britain's homeownership gap. Too many financially capable renters cannot build a deposit while paying high housing costs. The homes they can afford are in short supply, and the products designed to help often exclude the people or properties most in need of support.
Lloyds’ £5,000 deposit mortgage, for example, is available on homes worth up to £300,000 but excludes new-build properties. Leeds Building Society’s Start Mortgage requires a deposit of 2% or £5,000, whichever is higher, and excludes new builds. Metro Bank’s mortgage can reach 100% LTV, but only where an immediate family member joins as a borrower.
These products help, and lenders are right to manage risk carefully. Yet the criteria reveal the limits of relying on mortgages alone to solve the deposit gap.
The new-build contradiction
Mortgage providers exclude new build on many high LTV products for several reasons. Incentives, limited comparable sales and uncertainty over resale value can complicate a valuation, as RICS recognises. Developer contributions towards legal costs, stamp duty or upgrades may also affect a lender’s assessment of the property’s underlying value. Lenders also consider concentration risk where they hold multiple high-LTV mortgages on similar properties within the same development.
But blanket exclusions create a contradiction: products intended to unlock first-time buyer demand cannot always be used on the homes needed to increase supply. Rightmove reports that new developments coming to market are at their lowest since January 2017. If homebuyers cannot access suitable finance, sales slow and housebuilders have less confidence to invest. Risk should be managed through a more long-term view on valuation, underwriting and property criteria rather than blanket exclusion.
Who do these products actually help?
A family-supported mortgage may work for a homebuyer whose parents can accept joint responsibility. It does nothing for someone with a good income, a strong rental record and no family wealth. It can also transfer financial liability and emotional pressure to relatives, with missed payments potentially affecting family finances and relationships.
A £300,000 property cap may work in some areas but excludes many homebuyers in higher-priced markets. In May 2026, average prices were around £473,000 in Oxford and £404,000 in Brighton and Hove, while the England average was £292,000. The ceiling is already close to the national average and well below typical prices across London and the South East. For many aspiring homebuyers, the product may be unavailable not because they cannot afford the monthly payments, but because suitable homes in their area fall outside the eligibility criteria.
This is the missing middle: people who are not eligible for social housing, cannot rely on the Bank of Mum and Dad and may not qualify for existing homeownership schemes, but can sustain mortgage-level monthly payments.
They pay their rent and bills on time but cannot build a deposit alongside those costs. The income is there. The deposit is the barrier.
Even a 5% deposit on a £300,000 home is £15,000 before stamp duty, legal, valuation, mortgage fees and moving costs are considered. Reducing the percentage required does not necessarily make the total upfront sum realistically attainable.
We need a pathway, not a product
We need to think beyond the point of mortgage application. For many aspiring homebuyers, the missing piece is somewhere to live while they save, not another mortgage product. Through our RentSaveOwn model, eligible buyers move into the new-build home they intend to buy and build their deposit over a period of up to five years, typically taking around three and a half years. Savings, affordability and payment history are tracked throughout.
By the time the buyer is ready to purchase, the property no longer falls within a lender’s new-build criteria. Combined with an established payment and savings history, this could give them access to a broader range of high-LTV mortgages.
Own Homes therefore, works alongside low-deposit lending: it can create better-prepared future borrowers for lenders, unlock additional demand for housebuilders and give advisers another route for clients who are financially capable but not yet mortgage-ready.
Low-deposit mortgages are an important part of the answer. But real change will mean lenders, brokers, housebuilders and alternative homeownership providers sharing data and referrals, not just occupying separate parts of the same market.
Reducing the deposit required on application day is only half the job. The other half is building more credible ways for people to reach that day in the first place.
