Almost one in five first-time buyers are managing to raise a deposit of at least 40%, research by Moneyfactscompare.co.uk has found.

Amassing an adequate deposit is often the biggest barrier first-time buyers face and many rely on high loan-to-value (LTV) mortgages to get onto the property ladder.

But Moneyfacts has revealed that a significant minority are seeking mortgages at 60% loan-to-value or below, meaning they must have a sizeable deposit.

Of all the first-time buyers comparing products on the website, a deposit of between 5% or 10% was most common.

It found that 10% were seeking a 95% LTV mortgage and 31% were looking for a 90% LTV deal.

Based on average house prices this would equate to a deposit of £13,650 or £27,300 respectively.

But 17% of first-time buyers were looking to borrow at 60% LTV, translating to a deposit of £110,000 based on average prices.

These buyers could expect to save around £134 per month on mortgage costs compared to borrowers with the smallest deposits when borrowing the same amount due to the better rates available at low LTVs, according to the website.

Moneyfacts head of news Adam French says: “First-time buyers in particular are feeling the weight of affordability pressures, with many relying on more expensive high LTV loans due to the challenges of raising a sizeable deposit.

“Meanwhile, more established homeowners who have accumulated greater equity, are in a better position to benefit from lower LTVs and more competitive mortgage rates.

“However, a significant proportion of first-time buyers are seeking mortgages at lower LTVs, suggesting that many are receiving significant financial support from family contributions or inheritance.

“This marks a growing divide in the housing market as those without additional financial assistance face greater financial strain, particularly as they are more vulnerable to rising rates or potential housing market corrections.”