Half of aspiring first-time buyers are unaware that they may now be able to borrow up to £40,000 more than they could a year ago despite lenders easing affordability rules and introducing greater flexibility into the mortgage market.
New research from Mortgage Advice Bureau found that many renters hoping to buy in 2026 are still operating under outdated assumptions about what they can afford, potentially delaying their move onto the property ladder unnecessarily.
The survey of 1,000 renters planning to purchase their first home this year found that 50% were unaware borrowing power had improved in recent months, while 73% did not realise 5% deposit mortgages are widely available.
The findings come as several major lenders have relaxed affordability stress tests over the past year, following changes to market conditions and regulatory guidance, allowing some borrowers to access significantly larger loans than previously possible.
AFFORDABILITY ISSUES
Despite this, many prospective buyers remain cautious. More than a quarter (27%) said saving for a deposit remains the biggest obstacle to homeownership, with respondents taking an average of just over six years to save before considering a purchase.
The research also found that affordability remains heavily tied to monthly housing costs, with 47% saying they would consider buying immediately if mortgage repayments were comparable to what they currently pay in rent.
BIG CHALLENGE
Rachel Geddes (main picture), Strategic Lender Relationship Director at Mortgage Advice Bureau, says: “For many first time buyers, the biggest challenge isn’t just saving for a deposit – it’s knowing whether homeownership is actually within reach.
“What this research shows is that many aspiring buyers may still be making decisions based on outdated assumptions around their borrowing potential, as lenders continue to introduce greater flexibility into the market.”
Amanda Bryden, Head of Halifax Intermediaries & Scottish Widows Bank, says buyers now had “more opportunities to get onto the housing ladder than they did even 18 months ago”.
Meanwhile, April Mortgages Director of Mortgage Distribution Rachael Hunnisett warns that many buyers are “ruling themselves out before they’ve even explored their options”.
