FTB volumes drove the purchase market higher in June — but at loan-to-values that leave little buffer if prices shift
First-time buyers went from 44.8% of purchase cases in April to 52.1% in June, pushing the average loan-to-value (LTV) across all purchase cases up nearly seven points to 80.1%, according to data published in Heron Financial's Mortgage Client Sentiment Index Q2 2026.
The firm's case records show overall purchase activity grew through the quarter, rising from 26.9% of all cases in April to 34.9% in May and 34.6% in June, giving a Q2 average of 32%. The composition of that activity shifted as volumes grew. Movers made up half of all purchase cases in May before their share fell to 38.0% in June as first-time buyer volumes increased.
Across the full quarter, first-time buyers represented 45.1% of purchase cases. Their average purchase price was £339,172, with a mean loan of £268,148 and a mean deposit of £71,025. The average LTV for first-time buyers across Q2 was 81.4%, and the lowest interest rate secured by a borrower in this group was 4.06%. The average application-to-offer time was 15.1 days.
"The Q2 first-time buyer put down £71,025 and borrowed at 81.4%," said Francel Bangayan (pictured right), marketing manager at Heron Financial. "That is a deposit large enough to take years to assemble, on a loan-to-value that leaves little room if prices move.
"The takeaway: the quarter ended with more borrowers entering the market at higher LTVs than it started with."
Product choice among first-time buyers differed markedly from the wider market. Five-year fixed rates accounted for 43.6% of first-time buyer product selections in Q2, compared with 14.1% across the full book. Two-year fixed rates were chosen by 47.4% of first-time buyers, with 9.0% selecting other fixed terms.
The report notes that first-time buyers in the quarter were carrying the highest LTVs and were three times more likely than other borrowers to lock in for five years, reflecting a preference for payment certainty among those with the least financial buffer.
The average purchase price across all buyer types for the quarter was £460,356, with an average loan of £339,149.
Alongside the shift in buyer composition, the report recorded a decline in product transfers, which fell from 41.7% of all cases in April to 28.3% in June. Remortgages and purchases absorbed that shift, indicating a growing proportion of borrowers chose to go to market rather than remain with their existing lender.
Buy-to-let remained stable throughout, holding at approximately 13% of cases across all three months.
The index is based on Heron Financial case records for the period from 1 April to 30 June 2026. The firm notes that average purchase prices and loan sizes reflect the mix of clients it advised during the period and sit above national averages.
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