"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"
- Mike Ward - Armalytix
New research from Armalytix shows that half of UK first-time buyers are now taking out mortgages at 90% loan-to-value (LTV) or higher, underlining the growing affordability pressures in the property market.
The data reveals that 1 in 7 first-time buyers are stretching to 95%+ LTV where available. By contrast, only 22.6% of repeat buyers take on mortgages above 90%, highlighting a two-tier market in which first-time buyers face the highest financial risk.
Family contributions remain a key factor in getting on the property ladder. Among high-LTV first-time buyers, 25% received a family gift, typically around £10,000, which is often insufficient to reduce LTV or access better mortgage rates. Lower-LTV first-time buyers received larger gifts, averaging £30,000, giving them a tangible advantage in securing more affordable borrowing.
“High LTV has become the new normal for first-time buyers,” said Mike Ward, chairman at Armalytix. “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.”
Uptake of government support remains low. Only 32% of eligible first-time buyers used a government ISA in 2025, leaving family contributions as the primary mechanism for reducing borrowing requirements.
Repeat buyers are less reliant on gifts overall, but when support is received, it has a larger impact. The average gift share for non-first-time buyers was 25.8% of purchase price, compared with just 13.1% for first-time buyers, reflecting the advantages of equity recycling and intergenerational wealth transfer.
Armalytix’s research highlights the wider challenges in the property market. With affordability stretched, first-time buyers face higher financial risk, meaning lenders and advisors need to understand family support, government schemes, and borrowing pressures to better assist clients.
“First-time buyers are navigating a high-pressure market with limited room for error,” added 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.”
