Continued improvement in affordability helped support first-time buyer activity over 2025, according to the latest Nationwide Housing Affordability Report.

Affordability is most stretched in London and South of England, while the North and Scotland are the regions most affordable.

Commenting on the figures, Nationwide’s senior economist Andrew Harvey said that with price growth well below the rate of earnings growth and a steady decline in mortgage rates, affordability constraints had eased somewhat over the past year, helping to underpin buyer demand.

Indeed, the first-time buyer share of house purchase activity was above the long run average, supported by easier credit availability, with the share of high loan-to-value lending (i.e. with a deposit of 15% or less) reaching its highest level for over a decade. First-time buyer activity over the last year was around 20% higher than 2024 levels.

“There has also been an improvement in the first-time buyer (FTB) house price to earnings ratio (HPER) to 4.7. This is a continuation of the trend seen over recent years, with the ratio now slightly below its 20-year average. Consequently, this suggests it is a little easier for prospective buyers to save for a deposit, although it is still particularly challenging for those in the private rented sector, given rental increases in recent years.

He added: “Indeed, a 10% deposit on a typical UK first-time buyer property is around £23,000. Even based on saving 10% of average net pay (c. £320) per month it would take a prospective buyer nearly six years to accumulate this. However, the level of deposit required also varies considerably by region, reflecting differences in average house prices. For example, a 10% deposit in London is over three times larger than the equivalent in the North. It would also take a Londoner nine years to save for their deposit versus around four years for someone buying in the North, based on saving 10% of their average net pay.

Propertymark chief executive Nathan Emerson said that while it was encouraging to see affordability improving and first-time buyer activity picking up, the report underlined that homeownership remains out of reach for many, particularly those on lower and middle incomes.

“Regional and occupational disparities continue to shape who can realistically buy a home. Too many buyers are still reliant on financial help from family and friends, and this risks entrenching inequalities between those with access to support and those without.”

He continued: “To sustain and broaden access to homeownership, we need a joined-up approach that includes boosting housing supply, particularly of genuinely affordable homes, alongside targeted support for first-time buyers. Improving affordability is a step in the right direction, but it must translate into fairer access to housing across all regions and professions.”

The Mortgage Brain chief executive Enzo Mora commented: “First time buyers have always been the lifeblood of the property market so it’s encouraging to see affordability and opportunities improving.

“Many of those paying high rents or trying to save for a deposit can now fast track the buying process and we continue to work with lenders and house builders to connect first time buyers to the vast number of products and incentives available.”

He added: “We also need the new Planning and Infrastructure Act to start bearing fruit as soon as possible to increase the supply of new homes to improve mobility and affordability across the board.”