An analysis of affordability searches and results has revealed new insights into how the UK lending market is evolving. Acre, the brokerage platform which handles over 2.8 million affordability requests per month, has analysed requests and corresponding lender results from the year so far to give a snapshot of the state of lending across the UK amidst rising house prices and a widening gap in affordability across different regions.
In a significant shift, first-time buyers (FTB) are being offered significantly higher maximum loan sizes compared to what they have requested, rising from 1.49x the requested loan size to 1.57x over the last three months.This is likely to denote an increased willingness on the part of lenders.
First-time buyers eager to get on the ladder are borrowing 5% more than the same period last year, with the average loan size in the first half of 2025 reaching £240,299, compared to £227,717 in 2024. Despite this increase in borrowing, borrowers are struggling to keep pace with the average house price increase of 6.7% (ONS, May 2025), loan-to-value ratios are dropping for first-time buyers. On the other hand, for FTBs considering shared ownership properties, the average loan agreed stands at £111,890 with a more affordable loan-to-income value of 2.46x than the 3.40x seen for those borrowing without shared ownership.
Acre’s data also shows the stark North-South divide in how far FTBs are extending themselves. While the highest loan-to-income figures are predictably found in London and the South East, unexpected rural and small town pockets like Harrogate, Wick/Orkney, Falkirk, and Shrewsbury/Powys are now showing as notably expensive versus incomes compared to surrounding areas.
Justus Brown, CEO and founder of Acre, said, “Our findings lay out the crippling affordability challenges faced by many first-time buyers, being forced to borrow more, particularly in areas with a strong jobs market and in emerging expensive rural locations. Brokers are constantly navigating these choppy affordability waters for their clients, equipped with the responsibility of securing the best-suited mortgage without putting any undue pressure on them.”
London’s ring of unaffordability: Across London and South East England the loan-to-income ratio is approximately 3.65x. However, this rises significantly when looking to London’s outer postcodes of Bromley (BR), Croydon (CR), Southall (UB), Enfield (EN), Sutton & Morden (SM) where the loan-to-income ratio rises with UB being the highest at 4.16x.
Average first-time buyer loans in these regions exceed £250,000, a substantial difference compared to the rest of England, where loans average than £189,000.
Northern England demonstrates more cautious borrowing, with FTBs not extending themselves beyond a 3.2x loan-to-income ratio and all areas except Cumbria and Newcastle having an average LTI well under 3x.
Midlands and Southern England (excluding Greater London) present a mixed picture, with pockets of low borrowing on income but overall representing some of the highest.
Scotland shows a lower 2.86x loan-to-income ratio, yet the percentage of loan to property value is among the highest in the UK, with FTBs borrowing an average of 82% of the property's value. The average loan for first-time buyers in Scotland is now £167,508.
Wales also sees FTBs borrowing a large proportion (82.2%) compared to property values, with regional variations, with an average loan of £180,013.
When it comes to remortgages, repayment products hold terms that are incredibly favourable with an average of 10.3 lenders willing to lend, with an average affordable amount of 180% of the loan amount requested. Acre’s data also shows that those seeking interest-only options are seeking significantly higher loans (£343k on average) compared to repayment remortgages (£238k), suggesting some homeowners may have overextended themselves.
