Everything London’s first-time buyers need to know to get on the ladder in 2026

From new builds to no-deposit mortgages, here’s how hopeful first-time buyers can make the most of falling house prices

Anna White, The Standard

First-time buyers have returned in earnest to the home sales market this January, taking advantage of discounted prices, falling interest rates — the Bank of England reduced the base rate from four to 3.75 per cent in December — and an increase in high loan-to-value mortgages.

The price of a flat in London is at its lowest since Covid-19 swept across the UK and the housing market was forcibly shut.

Land Registry data shows the average price of a flat in the capital has fallen 10 per cent since its peak in September 2022 and now sits at £427,700.

The last time a flat was cheaper was in May 2020, when the homes sales sector had just reopened, having been closed for six weeks at the start of the pandemic.

“The market feels noticeably more vibrant than it did this time last year,” says Eva Bouzaki, manager of Stow Brothers in Hackney.

“The interest rate cut clearly had a positive impact on affordability. We are seeing more viewing inquiries from first-time buyers, increased new buyer registrations and busy viewing days.

“We are selling a one-bedroom flat in a period building in London Fields for £550,000 and have conducted 32 viewings so far this month.”

Her colleague Joseph Earnshaw in Walthamstow agrees: “There was a noticeable slowdown in activity last year due to the Budget and stamp duty rumours.

Many first-time buyers adopted a wait-and-see approach. With no changes introduced at this level and the interest rate cut, they are now returning in greater numbers with lots of viewings of flats.”

A falling flats market could be an opportunity for starter home buyers

At the start of last year there was a spike in first-time buyer purchasers as stamp duty relief ended. Young buyers pushed to complete deals in the first few months of 2025 to benefit from the outgoing scheme. Since then the price of a flat has slipped month-on-month.

This is part of a longer-term trend. London property and moving costs are so expensive that many first-time buyers now get on the ladder later, skipping their first flat and buying a house. This makes it harder to sell apartments and studios.

There are also more small flats on sale as landlords, who are facing more tax and more red tape, try to exit the private rental sector.

The supply of flats has dwarfed demand and therefore prices have fallen.

Alex Greaves, buying agent and founder of Ridgestone Property, says now is the time for first-time buyers to shop around.

“When a small flat tenancy ends we are seeing landlords trying to sell, there is a lot of choice right now for first-time buyers,” he says.

Buying agents are usually associated with high-end purchasers buying multi-million-pound homes but, to his surprise, Greaves has closed deals for first-time buyers recently.

“They have either lost out on their first home or been gazumped or are worried about overpaying,” he says.

It is indicative of how much choice there is for young buyers. His most recent client was renting in Wimbledon and has bought a two-bedroom flat in East Putney for £650,000 off a former landlord.

Low-deposit mortgages helping affordability

Despite softening property prices in London, affordability for first-time buyers is still stretched.

Data from Hamptons estate agency puts the average house price to income ratio on a first-time buyer purchase in the capital at 8.73 and 8.57 in outer London, meaning the average first-time buyer home costs nearly nine times a typical first-time buyer income.

Gareth Lowman, director at broker SPF Private Clients, says the bigger building societies such as Nationwide and Halifax will lend up to around six times earnings.

The result is that the majority of first-time buyers are still reliant on family money, according to agents.

This has fed through into sentiment. A survey from consumer champions HomeOwners Alliance (HOA) found the aspiration to own is falling.

Only 64 per cent of those polled said they would like to own a home one day, down from 71 per cent the previous year and the lowest since the tracking began in 2013.

But Angela Kerr, of the HOA, says this is the time for optimism. “House prices look to be coming down in London and interest rates are predicted to drop over the next 12 months so mortgage rates should edge down too,” she says.

“Importantly, affordability — the biggest barrier for this cohort — improved midway through 2025 when lending limits were eased.

“So even if you checked how much you could afford a year ago, lenders are now being more flexible. It’s worth checking again.”

She also highlights new 100 per cent mortgages. “You borrow the entire value of the home you want to buy rather than having to save the minimum five per cent deposit upfront.”

For example, Skipton Building Society’s 100 per cent loan-to-value Track Record mortgage is designed to help renters buy without a deposit if they have a proven history of making the rent.

It’s available as a five-year fixed loan with a repayment rate of 5.18 per cent. The loan-to-value is 95 to 100 per cent, with any small deposit helping to bring down the repayment rate.
“There is a lot of positivity out there among lenders who are broadening their criteria to help first-time buyers,” says Lowman.

He cites products from lender Generation Home, which allows up to six people to be named on a mortgage: either six sharers or, more likely, a couple with both sets of parents named.

Bouzaki, of Stow Brothers, says it’s not beyond the bounds of possibility to buy without help. “We do see some first-time buyers purchasing without the Bank of Mum and Dad,” she says.

“A finance professional on £70,000 moved in with his parents to save a £50,000 deposit. With this he bought a one-bedroom flat in Hackney Downs for £410,000 in the autumn.
New build developments with starter homes

The HiLight in Battersea completes this year with apartments from £595,000 alongside Finnish saunas and Vitamin C-filtered showers

At a higher price point is a 113-home development in Battersea built around the concept of wellness. Called the HiLight, it completes this year and is made up of one-, two- and three-bedroom apartments in an old Victorian candle factory.

Facilities include full body scans, cold immersion pods, Finnish saunas and Vitamin C-filtered showers. Apartments cost from £595,000.

Stow Brothers’ Earnshaw says ex-council flats and industrial conversions tend to appeal to first-time buyers, with both offering good space per pound value.

The Modern House is selling a one-bedroom flat on the third floor of a 1930s warehouse in Deptford for £315,000. Greenwich and Burgess Park are within cycling distance.