First-Time Buyer Opportunities in 2026: Why the Next Two Years Could Be Your Moment

The Bank of England has just reduced the base rate. The Financial Conduct Authority has also relaxed certain rules to support first-time buyers. At the same time, more lenders are launching schemes designed specifically to help people get onto the property ladder.

Put simply, the conditions for first-time buyers are starting to line up and 2026 could be one of the most attractive windows we have seen in years.

I have been in your shoes. I was once a first-time buyer myself, trying to work out how to make that first step onto the ladder. I am Ifthikar Mohamed, a mortgage broker with over a decade of experience, and I have helped more than 4,000 people through their mortgage applications. This article is based on exactly what I shared in my video and on what I am seeing daily in the market.

This is not theory. This is what is actually happening right now across London, Greater London and the wider UK.

What the Base Rate Cut Really Means for First-Time Buyers

When the Bank of England reduces the base rate, borrowing becomes cheaper for banks. Mortgage rates are not set directly by the base rate. They are largely driven by swap rates in the market. However, we are already seeing swap rates trend downwards as well.

If this continues, mortgage rates should gradually become more competitive. For first-time buyers, that means:

• Potentially lower interest rates
• Reduced monthly mortgage payments
• Improved affordability

Compared to where rates were two years ago, today’s mortgage pricing is already significantly better. If this downward trend continues into 2026, it creates a far more supportive environment for buyers entering the market for the first time.

FCA Relaxations and Higher Income Multiples

One of the biggest changes helping first-time buyers is how lenders are now assessing affordability.

Two years ago, most lenders were offering around 4.5 times income, with 5 times income being the upper limit for many applicants. Today, we are seeing lenders offering:

• 5.5 times income as standard in some cases
• 6 to 6.5 times income with strong profiles
• In certain scenarios, close to 7 times income

This is particularly important for buyers looking to purchase in and around London, where property prices often stretch affordability. That additional borrowing power can make the difference between renting and owning.

The Property Market Is Not Overheating

Another key factor is market stability.

Property prices are not skyrocketing. We are not seeing the same aggressive upward pressure that existed during previous booms. Combined with more reasonable interest rates, this creates a balanced environment where first-time buyers are not competing against runaway pricing.

Stability gives buyers time to plan, prepare and make informed decisions rather than rushing due to fear of missing out.

First-Time Buyer Schemes Available Right Now

Lenders and developers are actively introducing schemes to attract first-time buyers. These include:

Low and Zero Deposit Options

• Some lenders now offer 0% deposit mortgages, subject to strict criteria
• More commonly, 5% deposit schemes are widely available
• Certain lenders allow buyers to start with as little as £5,000 deposit

These schemes come with terms and conditions, so professional advice is essential.

Shared Ownership

Shared ownership can significantly reduce the upfront deposit required.

For example:

• Property value: £100,000
• Share purchased: 25% (£25,000)
• Deposit at 10% of share: £2,500

In real terms, this works out at around a 2.5% deposit on the full property value. While real- world prices are higher, the principle remains the same.

Developer Incentives

Many developers are contributing towards deposits or costs. For example:

• Buyer needs a 10% deposit
• Developer contributes 5%
• Buyer only needs to fund the remaining 5%

These incentives can be extremely helpful when cash savings are tight.

Check out our video on this:

What You Should Do Now to Get Ready for 2026

1. Focus on Your Credit Score

Lenders offering higher income multiples are taking on more risk. As a result, they expect an immaculate credit profile.

• Registering on the electoral roll
• Making all payments by direct debit
• Using credit cards responsibly and paying them off in full
• Avoiding unnecessary borrowing

Your credit score plays a critical role in accessing the best rates and higher borrowing levels.

2. Build Your Deposit Strategically

• A 5% deposit gives you more choice
• A 10% deposit opens up a wider range of lenders and rates

Even a small increase in deposit can dramatically improve your options.

3. Maximise Your Income the Right Way

Not all lenders assess income the same way.

For example, NHS staff may have:

• Basic salary
• Allowances
• Overtime or unsocial hours pay

Some lenders include these fully, others partially. Walking into your own bank does not guarantee the best outcome. Choosing the right lender for your income structure is key.

4. Control Your Spending

Lenders analyse bank statements carefully.

High spending on:

• Entertainment
• Gambling
• Non-essential subscriptions

can negatively impact affordability. Reducing discretionary spending well before applying can make a noticeable difference.

5. Use the Lifetime ISA (LISA)

The Lifetime ISA remains one of the most powerful tools for first-time buyers.

• Save up to £4,000 per year
• Government adds a 25% bonus
• Effectively free money towards your deposit

If you are eligible and not using a LISA, you are leaving support on the table.

6. Plan Early With a Mortgage Broker

Planning is everything.

• Understand what you can realistically borrow
• Improve your profile before applying
• Choose lenders that suit your circumstances

We act as mortgage mentors, guiding you step by step towards owning your first home.

Key Findings for First-Time Buyers in 2026

• Base rate reductions and falling swap rates are improving mortgage affordability
• FCA relaxations are allowing higher income multiples
• Property prices are more stable compared to previous cycles
• More low-deposit and specialist schemes are available
• Credit score and preparation are more important than ever
• Early planning significantly improves success rates

Frequently Asked Questions (FAQs)

Is 2026 a good time to buy as a first-time buyer?

Based on current trends, 2026 could be one of the most favourable periods in recent years due to improved affordability, lender flexibility and stable house prices.

Are 7 times income mortgages available to everyone?

No. These are typically reserved for applicants with excellent credit scores, strong affordability and stable income profiles.

Can I buy a home with no deposit?

Some 0% deposit schemes exist, but they are limited and come with strict criteria. Most buyers find 5% deposit options more achievable.

Do shared ownership schemes really need less deposit?

Yes. Because you only buy a share of the property, your deposit is based on that share, not the full value.

Does my spending really matter to lenders?

Yes. Lenders review bank statements in detail and excessive discretionary spending can reduce borrowing capacity.

Is the Lifetime ISA still worth it?

Absolutely. The 25% government bonus can significantly boost your deposit if you qualify.

Final Thoughts

Getting onto the property ladder is still achievable. The landscape is changing in favour of first-time buyers who prepare early, understand the options available and seek the right advice.

If you are planning to buy your first home in London, Greater London or anywhere across the UK, now is the time to start planning. I will also be linking my original video to this page so you can hear this explained directly in my own words.

If you need help, guidance or a clear plan, feel free to get in touch. I am always happy to help first-time buyers turn their home ownership goals into reality.

Important FCA Warning

As a mortgage is secured against your home, it may be repossessed if you do not keep up the mortgage repayments.