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Paula Higgins , CEO of property advice website HomeOwners Alliance, is more optimistic. “Our research showed that 42% of aspiring homeowners think now is a bad time to buy, but we disagree. The outlook for 2026 is one of cautious optimism, although first time buyers still face a battle. There are signs of improvement. Mortgage rates are drifting down, and a price war has pushed some fixed deals below 3.6%, levels unseen since before the 2022 rate spike. We expect interest rates to keep falling into 2026. Crucially, mortgage affordability tests have eased, with lenders
relaxing stress-test rates and allowing higher income multiples, meaning some first time buyers can now borrow more on the same income. But the Budget was still a missed opportunity. With rents at record highs, saving for a deposit remains the biggest barrier. We needed bold action: reform of the Lifetime ISA penalty and incentives to build affordable homes. The Government’s plan to consult on a new ISA is welcome, but it must scrap the 6.25% penalty, keep the bonus and raise the price cap. We think 2026 could be a better year, and for clear, practical guidance, visit the HomeOwners Alliance website for everything first time buyers need to know, including the latest mortgage rates.”
Sheetal Smith , Sales & Marketing Director at Pennyfarthing Homes, was hoping for the return of a Help to Buy-style initiative. “While we would certainly welcome it, it was clear it wasn’t going to reappear at this Budget. That said, there are some positives. Increased support for backing apprentices through small businesses and SMEs is encouraging and will help strengthen the construction workforce for the future. Investment in high streets, infrastructure and local schools is also welcome. Strong local amenities create thriving communities where the new home developments we build can succeed. Anything that supports our towns and villages is a step in the right direction. “However, the Budget still falls short on measures that would meaningfully increase housing supply. The planning system remains slow and under- resourced, and without targeted support for first time buyers and developers alike, the industry simply cannot deliver the homes the country urgently needs. As we head into 2026, it’s clear that first time buyers are going to need more support, not less. Buying costs continue to climb, mortgage affordability remains tight, and the Bank of Mum and Dad simply won’t be able to stretch as it once did. The generous family help that propped up so many purchases over the last decade is naturally fading, and it seems there are many younger buyers who are feeling that gap. “This year’s Budget didn’t offer the support that many of us were hoping for. Despite the noise around homeownership, there was very little in the way of concrete help for those trying to get on to the ladder for the first time. Without targeted support, the barrier remains high, and that’s exactly why I think that buyers will increasingly turn to developers and lenders for practical and structured support. At Pennyfarthing Homes, we’ve already widened our offering from key-worker packages to First Homes and, where possible, 5% gifted deposits. But industry wide, it’s clear that more is needed. Across the board, all housebuilders have been calling for help with a shared equity model that reflects today’s affordability pressures. If 2026 is going to be a year where first time buyers can still make that first step on to the ladder, it will be because of a collaborative approach, where the housebuilding sector and the Government work together to create clearer, more accessible routes into homeownership.”
Richard Donnell , Executive Director at Zoopla, says, “The recent Budget introduced only modest tax reforms, targeting the top 0.5% of homes. It’s a significant relief for the 200,000 homes in the £500,000 to £2,000,000 bracket that are not facing additional property taxes, and we expect this to boost market activity at the beginning of 2026. The mainstream market, where first time buyers operate, experienced a strong 2025 with an increase in sales, primarily driven by stabilised mortgage rates. First time buyers are the largest
buyer group – accounting for almost two in five sales – and they have seen a greater choice of homes and improved mortgage affordability over the past six months. Consequently, FTBs outside southern England are seeking properties at prices 5-10% higher than they were a year ago. “Overall, we anticipate a rebound in market activity in 2026, as those who postponed moving decisions due to Budget speculation return. We expect a steady year ahead, with modest house price inflation and sales remaining around 1.15 million, consistent with 2025. Mortgage lending is expected to stay competitive, and first time buyers should prioritise understanding their affordability as the first step in their homebuying journey.”
Emmanuel Asafo-Agyei , Assistant Relationship Manager Mortgage Broker at VM Finance Ltd, found that last year brought innovation and flexibility for first time buyers; £5,000 and 0% deposit options are now available, and he is optimistic about 2026. “The problem of saving for a deposit in a high cost of living environment is now being recognised. Traditionally a lower deposit would mean that a first time buyer could not buy because the borrowing amount available to them
was not enough and/or property prices were so high that finding 10% or even 5% of £500,000 purchase prices was a big ask for some. I believe that the market is now very much focusing on the problems faced by first time buyers and is actively creating solutions. Some would say if you looked hard enough, you would see it is a buyers’ market and thus for first time buyers now is probably the best time in terms of funding options that there has been since the Stamp Duty holiday of 2021. Speaking of which, a similar provision for first time buyers in the Budget would have been a real positive for first time buyers that I would have liked to have seen.”
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