An affordability analysis by mortgage brokerage platform Acre has found that first-time buyers are being offered higher maximum loan sizes than they are asking for, with average offers 1.57 times more than the requested amount – up from 1.48 just three months ago.
Acre, which handles over 2.8 million affordability requests per month, analysed requests and corresponding lender results from the year so far to assess the sentiment of lenders amid a widening gap in affordability across the regions.
The data, based on over 14 million affordability requests made on Acre’s platform, found that first-time buyers are borrowing 5% more than the same period last year, with an average loan-to-income ratio of 3.40. The average loan size in the first half of 2025 reached £240,299, compared to £227,717 in 2024.
‘Despite this increase in borrowing, borrowers are struggling to keep pace with the average house price increase of 6.7% and loan-to-value ratios are dropping for first-time buyers’, Acre said.
The analysis also reveals a significant north-south divide. In London and the South East, the loan-to-value income ratio is approximately 3.65, which rises to 4.16 in some London outer postcode areas. The average first-time buyer loan in these regions exceeded £250,000, compared to £189,000 in the rest of England.
In Northern England, the loan-to-income ratio is 3.2 in all areas except Cumbria and Newcastle, where it averages ‘well under 3’. Scotland demonstrated the lowest loan-to-income ratio, at just 2.86, with first-time buyers borrowing an average of 82% of the property value.
Justus Brown, CEO and founder of Acre, said of the analysis:
“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.”
The analysis comes as lenders were given more flexibility when deciding loan amounts in relation to borrowers’ affordability. The Financial Policy Committee recommended the changes after acknowledging the average house price remains at around 6.5 times the average salary in the UK, placing the sums required for the initial deposit and subsequent payments out of reach for many people – even if they could demonstrate their ability to meet repayments.
