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UK Cities Face Mortgage Market Challenges for First-Time Buyers

  //house-home.news-articles.net/content/2026/01/1 .. age-market-challenges-for-first-time-buyers.html
  Published in House and Home on Sunday, January 18th 2026 at 6:34 GMT
      Locale: UNITED KINGDOM

Sunday, January 18th, 2026 - The dream of homeownership is proving increasingly elusive for first-time buyers in several key UK cities, with Glasgow, Edinburgh, Liverpool, and Sheffield facing what many experts are calling the most challenging mortgage market in recent years. While house prices have begun to moderate from their pandemic peaks and more properties are entering the market, a stubborn refusal of mortgage rates to fall dramatically, coupled with stricter lending criteria, is creating significant hurdles for aspiring homeowners.

Recent analysis by This is Money has highlighted the difficulties facing potential buyers in these cities, traditionally viewed as accessible entry points into the property market. The situation represents a complex interplay of factors, creating a perfect storm that's pushing the prospect of homeownership further out of reach for many.

A Perfect Storm of Economic Realities

The current predicament isn't a simple case of rising house prices; it's a more nuanced situation. House prices have fallen from their 2022 highs, and the increased inventory of properties signals a shift in the market. However, the slow descent of mortgage rates - currently averaging around 5.4% compared to a 3.3% rate at the beginning of 2022 - is a critical factor. This rate increase has drastically impacted affordability, stretching household budgets and reducing the borrowing power of first-time buyers.

Beyond rates, lenders are exhibiting a heightened sense of caution. The initial surge in mortgage rates caught many first-time buyers off guard, and a significant number have struggled to manage higher monthly repayments. This experience has prompted lenders to tighten their lending criteria, making it more difficult for prospective buyers to secure approval, even with demonstrable income and stable employment.

City-Specific Challenges

Let's take a closer look at the situations in each of the cities identified by This is Money:

• Glasgow: A major economic hub in Scotland, Glasgow has experienced a notable cooling in its housing market. While affordability remains a relative strength, the decline in house prices combined with restrictive mortgage availability presents a double challenge.
• Edinburgh: Similar to Glasgow, Edinburgh's housing market has felt the pressure of economic headwinds. The city's appeal as a desirable place to live remains strong, but the increased financial burden of securing a mortgage is impacting buyer activity.
• Liverpool: Known for its relatively affordable housing options, Liverpool is now experiencing a slowdown. The traditionally accessible market is now facing increased scrutiny from lenders, effectively raising the barrier to entry for first-time buyers.
• Sheffield: Situated in the north of England, Sheffield's market is reflecting the broader national trend of challenging conditions for first-time buyers. While the city has inherent appeal, economic realities are restricting accessibility.

Expert Perspectives and Future Outlook

Industry experts consistently point to the need for improved conditions to allow more first-time buyers to enter the market. The hope is that further reductions in mortgage rates - driven by anticipated movements in the Bank of England base rate - will ease the pressure. However, lenders' cautious approach suggests this won't be a rapid process.

Several potential solutions are being discussed, including government schemes designed to incentivize lending and increase affordability. These might involve guarantees for lenders or targeted support for specific demographics of first-time buyers. However, the long-term viability of such schemes often hinges on political will and economic stability. Ultimately, a combination of factors - including consistent and meaningful rate reductions, a loosening of lending criteria, and potentially innovative government initiatives - will be necessary to unlock the housing market and allow more first-time buyers to achieve their dream of homeownership.