First-Time Buyers in 2025: Is Now the Right Time to Buy a Home? 

First-Time Buyers in 2025: Is Now the Right Time to Buy a Home?

With the Bank of England recently cutting the base rate down and some lenders introducing more generous income multiples for renters, the big question for first time buyers is back on the table.

Do you buy now or wait for mortgage rates to drop even further?

Why This Rate Cut May Change the Game

Mortgage Lenders had already started to anticipate the Bank of England’s latest decision to reduce the base rate, with lower fixed-rate mortgage deals starting to become more available in recent weeks across high-street and specialist lenders.  We are not going to be heading back to the ultra low rates of the last decade as this is the new normal. However, this another clear sign of the mortgage market continuing to loosen up.

Especially for renters as certain mortgage lenders have increased their income multiples to try and help people get on the property ladder. At The Mortgage Broker does have lenders offering up to 5.5× your income if you can show a solid rental payment history,  and there are more routes than ever for first time buyers to get on the property ladder.

Why Waiting Could Cost You

We find that some first time buyers hold off because they hope mortgage rates will keep falling. One key thing to remember is that you can get a mortgage with a short term fixed rate, which means you can get onto the property ladder, and then remortgage to lower rates as and when they do come available. It is never a factual situation on what will happen to mortgage rates, so it’s hard to know for certain when the best time to buy is. However, here are 3 risks to consider whilst deliberating the right time to buy a property.

1. House Prices Are Rising Again
   Post election confidence, more competitive mortgage rates and pent up demand are pushing property prices higher. If prices rise by just 5% over the next year, that £250,000 home could cost you £12,500 more. This could outweigh the potential saving on a slightly lower mortgage rate.

2. Your Dream Property Could Go – Competitive House Market
   In a competitive market, waiting even a few months could mean losing the home you want to another motivated buyer with a Mortgage in Principle.

3. Don’t Forget – You Are Already Paying a Premium in Rent 
   UK rents remain historically high according to Zoopla’s data. In many cases a mortgage could actually cost less than your monthly rent, and with new higher income multiples for renters it is worth comparing.

The New Lender Rules That Help Renters Buy Sooner

Until now, many renters struggled to prove affordability despite already paying high rents. However, certain products flip this on its head if you are able to:

• Show 12 months of paying a rental figure that is within 10% of a prospective new monthly mortgage payments. For example, if your rent is £2000, you can be considered for a mortgage with monthly payments of £2,200.
• To qualify for the higher income multiple, you now need to have one applicant earning over £75,000 (rather than the previous threshold of £100,000
• There is more flexible on deposit sources including funds from limited companies or equity release

What This Means for First-Time Buyers in 2025

This combination of:

• Lower mortgage rates following the Bank of England’s cut
• Rising house prices and market competition
• New lending flexibility for renters

…means the “wait and see” approach could cost more than it saves.

For more information around buying a property, you can read The Mortgage Broker’s First Time Buyer Guide.

Should You Buy Now?

Ask yourself:

• Is your rent close to what your mortgage payment would be?
• Do you have a stable income and a reasonable deposit (5–10%)?
• Would a price rise in your chosen area price you out of getting on the property ladder?

If the answer to most of these is yes, or if you are unsure, then now is a good time to speak to a The Mortgage Broker.

The Bottom Line

You can’t control what interest rates will do next, but you can take advantage of:

• Today’s lower rates compared to last year
• More generous affordability rules for renters
• The ability to fix your mortgage rate for peace of mind

Buying now could mean securing a home before prices climb further  and swapping expensive rent for a mortgage that builds equity in your own property.

What to assess your affordability? Then speak to The Mortgage Broker today, and get free advice, affordability calculations, and a non binding Mortgage in Principle. 

Unsure what a Mortgage in Principle is? Watch our video below.

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At The Mortgage Broker, we work with thousands of mortgage products,  not just the high street. From 5% deposit mortgages to specialist deals for renters, we’ll guide you through every step.