"While government schemes like the Lifetime ISA or Help to Buy ISA certainly help, family gifts increasingly determine who can move forward and who remains stretched"
- Mike Ward - Armalytix
New data from Armalytix highlights the growing financial pressures facing UK first-time buyers, with half now taking out mortgages at 90% loan-to-value or higher. One in seven is stretching to 95%+ LTV now these options are available, compared with just 22.6% of repeat buyers, highlighting a two-tier market where FTBs face the greatest risk.
Family contributions continue to play a significant role in helping FTBs get on the property ladder. Armalytix found that 25% of high-LTV first-time buyers received a family gift, typically around £10,000. This amount is often too small to move them into a lower LTV bracket or secure better mortgage rates. Among lower-LTV first-time buyers, 36% received gifts averaging £30,000, providing a clear advantage in achieving lower borrowing costs and reduced financial stress.
Mike Ward, chairman at Armalytix, notes: “High LTV has become the new normal for first-time buyers. While government schemes like the Lifetime ISA or Help to Buy ISA certainly help, family gifts increasingly determine who can move forward and who remains stretched. Those with larger family backing move ahead, while others face higher costs and greater risk.”
Despite the availability of government schemes, uptake remains limited. Armalytix data shows only 32% of eligible first-time buyers used a government ISA this year. For most, family support remains the defining factor in reducing borrowing needs.
Repeat buyers are generally less reliant on gifts, but when they do receive support, it has a larger impact. The mean gift share of purchase for non-first-time buyers was 25.8%, compared with just 13.1% for FTBs, reflecting the advantages of equity recycling and wealth transfer.
The data underscores wider challenges in the property market. With affordability stretched, first-time buyers face higher financial risks, making it essential for lenders and advisors to understand these dynamics to better support clients.
“First-time buyers are navigating a high-pressure market with limited room for error,” adds Ward. “Understanding the role of family support, government schemes, and borrowing risks is crucial for anyone advising or lending in this market. Our analysis helps professionals make informed decisions quickly, reducing risk and improving outcomes for buyers.”
