First-time buyer affordability is being stretched further as increased borrowing is not keeping pace with house prices, new data from Acre suggest.

The mortgage platform’s analysis of 14m affordability searches in the first half of 2025, show that first-time buyers are borrowing an average of £240,299, up by 5% on 2024 when they borrowed an average of £227,717.

This is despite the increase in house prices of 6.7%, according to the Office for National Statistics data for May.

This means their loan-to-value ratios are falling, although there are significant regional variations.

Acre’s analysis also shows that interest-only borrowers are taking out higher loans at an average of £343,000, than those choosing repayment, where the average is £238,000.

Today’s figures also show a significant North-South divide in how far first-time buyers are extending themselves.

The highest loan-to-income figures are found in London and the South East where prices are highest, but there are further rural and small town pockets like Harrogate, Wick, Orkney, Falkirk, Shrewsbury and Powys that are now notably expensive versus incomes compared to surrounding areas.

Acre chief executive Justus Brown says: “Our findings lay out the crippling affordability challenges faced by many first-time buyers, being forced to borrow more, particularly in areas with a strong jobs market and in emerging expensive rural locations.

“Brokers are constantly navigating these choppy affordability waters for their clients, equipped with the responsibility of securing the best-suited mortgage without putting any undue pressure on them.”