A significant proportion of prospective first-time buyers are delaying property purchases due to misconceptions about minimum deposit requirements, according to research from Mortgage Advice Bureau (MAB).
The broker’s survey of renters planning to buy in 2026 found that 39% believe a deposit of at least 10% is required to purchase a home, while only half correctly identified 5% as the typical minimum required deposit.
Low awareness of mortgage options
The research reveals limited awareness of alternative mortgage products among prospective buyers. Around 73% were unaware of 95% loan-to-value mortgages, 80% had not heard of track-record mortgages, and 70% were unaware of the full range of family-assisted options available.
Rachel Geddes, Strategic Lender Relationship Director at Mortgage Advice Bureau, said: “For many aspiring homeowners, the biggest barrier isn’t always the reality of the deposit required – it’s what they believe that number needs to be.”
The findings come as UK housing market activity shows signs of weakening, with buyer demand falling in recent months.
Barriers to entry
The survey identified that 27% of respondents cited saving for a deposit as their biggest obstacle to homeownership, while another 31% said they did not know how to get started with the buying process.
“What this research shows is that a large proportion of buyers are making decisions based on assumptions, particularly around how much they need to save before they can even consider buying,” Geddes added.
The findings suggest many prospective buyers may be ruling themselves out before fully exploring available options. This knowledge gap could be suppressing buyer activity at a time when lenders are expanding their low-deposit mortgage products.
Geddes noted: “With a wide range of low-deposit and alternative mortgage options now available, understanding the different routes to homeownership is crucial.”
The research indicates that improved awareness of actual deposit requirements and available mortgage products could potentially unlock demand from first-time buyers currently sitting on the sidelines of the property market.
