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as of 14 December 2025. Past performance is not a reliable indicator of future performance.

as of 14 December 2025. Past performance is not a reliable indicator of future performance.

as of 14 December 2025. Past performance is not a reliable indicator of future performance.

The week ahead

Source: ig

Source: Bloomberg Europe

Source: reuters

First-time buyers are taking out larger mortgages than ever before as rising wages and looser affordability tests allow them to buy properties that were previously beyond their budget.

The average first-time buyer borrowed £210,800 in the year to September, a record high, according to analysis by Savills, the property agent.

First-time buyers accounted for 20% of all spending in the UK housing market in the 12-month period, which is the highest level since at least 2007, it added.

This effect is even more pronounced in places such as London, with separate research from the estate agent Hamptons revealing that first-time buyers made more than half of all purchases in the capital this year.

In total, Savills said mortgage lenders loaned a record £82.8bn to 390,000 first-time buyers in the period, a 30% increase on the previous year.

The larger mortgages come as some first-time buyers skip the traditional first rung of the property ladder and buy a house rather than a flat. The average age of a first-time buyer is 34, according to the Mortgage Advice Bureau, while 31% have children by the time they get on the property ladder.

Many first-time buyers also took advantage of the stamp duty holiday, which let them pay no tax on the first £425,000 of a property's value, to buy a larger home. This limit dropped back down to £300,000 in April. They also benefited from a "buyer's market", with prices falling in some parts of the country.

Lucian Cook, the head of residential research at Savills, said a significant driving force behind the record borrowing had also been the "slightly more relaxed approach" of lenders.

"Home ownership is more accessible now than at any point in the last three years, thanks to lower borrowing costs, lower real house prices, and more accessible mortgage debt," he said.

Mortgage lenders typically do not lend more than 4.5 times a borrower's income and also consider whether someone could still afford repayments if interest rates soared, in a check known as "stress tests".

However, in March the Financial Conduct Authority said that the way some lenders were conducting their stress testing "may be unduly restricting access to otherwise affordable mortgages". It reminded lenders that companies have "flexibility to design their test in a way that is appropriate" for their customers.

Since then, most lenders have reduced the interest rate at which they stress test borrowers, with most first-time buyers now able to increase their borrowing by £20,000-£40,000.

The relaxation of lending rules comes at a time when mortgage rates are easing , with an average two-year fix now at 4.91% and a five-year fix at 4.86%, according to Moneyfacts, a financial services provider. These are the lowest rates since before Liz Truss's disastrous mini-budget in September 2022.

A separate analysis found that house hunters could typically snap up a property for about £2,000 less than a year ago and about £6,700 less than the average only a month ago, according to Rightmove.

Across Britain, 2025 is ending with average asking prices at 0.6% (£2,059) less than late 2024. At £358,138, the average asking price in December is also 1.8%, or £6,695, lower than in November, according to the website.

Annual growth in asking prices has been strongest in the north-west of England (2.6%), flat in London (0%) and most negative in the south-west and south-east (both at minus 2.7%). Rightmove said prices usually fall in December but this year's decrease is bigger than usual.

However, a bigger than usual "Boxing Day bounce" is also expected by the website, as people who put their home moving plans on hold because of budget uncertainty start looking again after Christmas.

Source: GUARDIAN

Source: morningstar

Source: reuters