Choice of low-deposit deals hits highest for 17 years

More low-deposit mortgages are available to choose from than at any time since the financial crisis of 2008, according to new figures.

The number of deals that need a deposit of 5% or 10% have risen to their highest level since then, data from financial information service Moneyfacts suggests.

The extra choice is a boost for first-time buyers, although house prices and mortgage rates are higher than they were for much of the last 17 years.

And competition is tough, with homes typically listed for just over a month before a sale is agreed, according to separate figures from property website Zoopla.

The UK housing market has been relatively settled in recent times, although buyers still need to navigate uncertainty over interest rates and changes to stamp duty in England and Northern Ireland.

For buyers able to offer a deposit of 5% of the home loan, there are 442 mortgages to choose from, according to Moneyfacts.

Two years ago, the choice was from fewer than half of that total, at 204.

Borrowers able to pay a 10% deposit now have 845 products to choose from, up from 684 in April 2023.

However, they still have to pay a mortgage rate of well over 5% on average, while a borrower who pays a 40% deposit typically pays a rate of under 5%.

It has been hard for many prospective first-time buyers to save due to the rising cost of renting in recent years.

Doug Hepper, 30, from Tewkesbury, is a dad and wants to buy his first home.

But due to the cost of living doing so is almost impossible in the short-term, he said.

“When I grew up, I thought the normal thing was to get married, have kids and buy a house around the time of being 30,” he added.

“The kid came first but I never thought the buying the house part would be so far out of reach.”

But Rachel Springall, from Moneyfacts, said there was a flourishing choice of mortgages for those whose ability to pay a deposit is stretched.

“A rise in product availability for aspiring homeowners is a healthy step in the right direction,” she said.

However, she said only 6% of all deals available to borrowers across fixed and variable mortgages had a deposit requirement of 5%, so there was still “room for improvement”.

Mortgage rates remain difficult to predict owing to uncertainty created by US tariff policy on the wider economy.

While securing a mortgage is one thing, buyers also need to act relatively quickly when it comes to finding a new home, data suggests.

Homes in England and Wales spend an average of 36 days on the market before a sale is agreed, according to news figures from the property portal Zoopla.

Sales were agreed on half of homes within two months of being listed, it said. To complete a sale, sellers and buyers will typically need another four to six months, depending on the complexity of the transaction.

The fastest sales were agreed for two-bedroom homes, at an average of 23 days, while homes with four bedrooms or more typically took an extra 15 days.

Homes in northern regions of England tended to sell faster than homes in the south, where prices are higher, it said.

Even so, the fastest selling, with an agreed sale taking an average of 19 days, had a north-south mix, with Manchester and the London borough of Waltham Forest hitting that mark.

“Households that are thinking about listing their home and moving in 2025 need to set their asking price at the right level and take the advice of local agents,” said Richard Donnell, executive director at Zoopla.

“Buyers have a lot more choice of homes for sale than a year ago. Aiming too high on the asking price is likely to impact saleability and how long you may have to wait to agree a sale.”

Zoopla uses a median average figure (the mid-point) for its data. It also discards homes that have been listed for more than six months, as it considers them to be unlikely to sell.

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