Nationwide says affordability continued to improve for first-time buyers throughout 2025, helped by slower house price growth, rising wages and gradually falling mortgage rates. However, the picture is far from uniform, with clear differences emerging depending on income level, occupation and location.
While overall conditions have become more favourable, Nationwide highlights that affordability still varies sharply across demographic groups. Buyers working in sales and customer service roles continue to face the greatest pressure, whereas those in managerial and professional occupations generally find it easier to meet mortgage costs.
From a regional perspective, affordability remains most stretched in London and much of southern England. By contrast, buyers in northern England and Scotland benefit from more manageable housing costs relative to earnings, making these areas among the most affordable in the UK.
Andrew Harvey, Nationwide’s senior economist, said that the balance between house prices, wages and borrowing costs has shifted slightly in buyers’ favour. He noted that price growth has remained well below earnings growth, while mortgage rates have edged lower, easing affordability constraints compared with recent years.
Nationwide reports that first-time buyers accounted for a larger share of housing transactions last year than the long-term average. In fact, their share of purchases was around 20% higher than in 2024, suggesting improving confidence among new entrants to the market.
According to the lender, a buyer earning the average UK income and purchasing a typical first-time buyer home with a 20% deposit would spend around 32% of their take-home pay on monthly mortgage repayments. While this is slightly above the long-run average of 30%, it is well below the peak of 48% seen in the late 1980s.
There has also been a noticeable improvement in the house price-to-earnings ratio for first-time buyers, which now stands at 4.7. This figure is marginally below its 20-year average, indicating that saving for a deposit has become somewhat more achievable than in the past.
That said, Nationwide cautions that building a deposit remains difficult for many, particularly those renting privately. Strong rental growth in recent years has made it harder for tenants to put money aside, despite broader improvements in affordability.
As a result, support from family and friends continues to play a major role. In 2024 and 2025, more than a third of first-time buyers relied on financial help, whether through gifts, loans or inheritance, to raise their deposit.
Looking at occupations in more detail, Nationwide found that mortgage payments take up the smallest share of take-home pay among those in managerial and professional roles, reflecting higher average earnings. Encouragingly, affordability has improved across all job categories since 2024.
The biggest gains were seen among workers in caring, leisure and other service roles, where wage growth has been relatively strong. Despite this, affordability remains most challenging for people in sales, customer service and so-called elementary occupations, such as cleaners, couriers and labourers.
For these groups, typical mortgage payments can absorb around half of take-home pay, underlining how income differences continue to shape access to home ownership. Nationwide points out that managers and senior officials typically earn around twice as much as those in administrative and secretarial roles, helping to explain the disparity.
Regionally, most parts of the UK saw affordability improve over the past year when measured by mortgage costs as a share of income. Northern Ireland was the main exception, where strong house price growth led to a deterioration in affordability despite mortgage payments remaining below the UK average.
London recorded the largest improvement for the second year in a row, driven by modest price growth, solid earnings increases and lower interest rates. Even so, the capital remains by far the least affordable part of the country.
Affordability pressures also persist across much of southern England, whereas the North, Yorkshire and the Humber, and Scotland now sit slightly below their long-term averages for mortgage costs relative to income.
Harvey concluded that London continues to stand out, with first-time buyers typically earning significantly more than the regional average, reflecting the high barrier to entry. In contrast, in areas such as the Midlands and Scotland, first-time buyer incomes are closer to — or even below — regional averages, pointing to healthier and more balanced housing affordability.
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