Over two in five first-time buyers (42%) are opting for high loan-to-value (LTV) mortgages, according to analysis by Moneyfacts, although figures showed there is also a significant minority seeking deals with higher deposits.

Three in 10 first-time buyers (30%) are opting for 90% loan-to-value (LTV) mortgages, while the data also showed that 12% are looking at 95% LTV options.

Moneyfacts suggested this hints at many first-time buyers relying on 5-10% deposits, which translates to £13,560 to £27,120, at an average UK house price of £271,188.

However, Moneyfacts also reported that 31% of first-time buyers are also seeking mortgages with sub-75% LTVs. Based on a 25% deposit on the average UK house price would requiring around £67,800, Moneyfacts said there is also a distinct group of first-time buyers in a favourable financial position.

Head of consumer finance at Moneyfacts, Adam French, suggested that the widespread nature of first-time buyer LTV demand reflects a housing market “increasingly shaped by unequal starting points”.

“While many first-time buyers are stretching themselves with 90–95% LTV mortgages due to deposit constraints, a notable minority are entering the market with substantial deposits, often helped by family support or inheritance,” French commented.

“The concern is that it is creating a two-tier market where buyers with higher deposits can access cheaper rates and lower monthly repayments, while others pay a hefty premium.

“For second-time buyers and remortgage customers, the data shows equity remains king, with most waiting to build at least 25% equity. Although wise buyers should note that materially cheaper average rates kick in at around 15% equity.”

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