North East first-time buyers borrowing nearly 90p in every £1 of property value, ONS figures show

First-time buyers in the North East of England took out mortgages covering an average of 89.8 per cent of their property’s value in 2025, according to the Office for National Statistics, which based its analysis on Financial Conduct Authority Product Sales Data. That leaves a typical deposit of just over 10 per cent — compared with closer to 20 per cent for first-time buyers in London, where the average loan-to-value ratio was 80.2 per cent.

Scotland came in just behind the North East at 89.7 per cent, with Wales recording 88.9 per cent. The figures show that buyers in these three areas are entering the market with some of the smallest deposits relative to purchase price anywhere in the UK.

London’s position is the striking outlier here. Despite being the most expensive part of the UK housing market by price, first-time buyers there are putting down proportionally larger deposits than anywhere else. The ONS points to higher average incomes and larger contributions from family — so-called intergenerational wealth transfers — as factors that help London buyers reach lower loan-to-value ratios, even when the absolute sums involved are far greater.

Nationally, the UK median first-time buyer mortgage loan-to-value ratio edged up from 85.0 per cent in 2024 to 85.6 per cent in 2025, the figures show — a small but consistent move towards higher borrowing relative to property value year-on-year.

High loan-to-value ratios carry real financial risk. Buyers borrowing close to 90 per cent of a property’s value have little buffer if house prices fall, and can find themselves in negative equity — owing more than the home is worth. Some mortgage products are also unavailable above certain loan-to-value thresholds, which can limit options for refinancing.

The English Housing Survey for 2024–25 recorded around 967,000 recent first-time buyers in England, with 14 per cent in London and 86 per cent elsewhere. Government schemes including the Mortgage Guarantee Scheme have been designed to support high loan-to-value lending — 86 per cent of completions under that scheme were by first-time buyers — but critics argue such support may sustain house prices rather than tackle the underlying affordability problem in lower-income regions.