Buying a UK home with a small deposit has got easier
Key Points
- NatWest's lending to buyers with deposits under 10% more than doubled in six months
- That part of its mortgage book grew from £4.52 billion to £9.48 billion
- New small-deposit lending in the half nearly matched the whole of 2025
- The bank lent £8.20 billion to first-time buyers between January and June
- Average deposits on new purchases are shrinking, with typical loan-to-value now 72%
NatWest more than doubled its lending to homebuyers with deposits of under 10% in the first half of 2026, taking that part of its mortgage book from £4.52 billion to £9.48 billion.
The bank advanced £1.31 billion to owner-occupiers borrowing above 90% of a property’s value between January and June, against £1.68 billion across the whole of 2025.
Its average loan-to-value on new owner-occupier lending edged up to 72% from 71%, meaning buyers are putting down slightly less. Lending in the 80% to 90% band also grew, from £21.56 billion to £24.84 billion.
First-time buyers took £8.20 billion of the bank’s mortgage lending over the half. NatWest has widened its reach through tie-ups with Rightmove and Landbay, and its total mortgage balances grew 3.6% in six months.
The bank puts the shift in its loan-to-value profile down to a mix of rising house prices and higher new business volumes, including its support for first-time buyers.
Borrowers already on its books are holding up. Mortgage arrears and forbearance stayed broadly flat, with the stock of customers on forbearance arrangements at £1.27 billion against £1.22 billion at the end of 2025, and provisions against mortgage losses barely moved.
The wider picture is less generous. NatWest’s own central forecast has UK house prices rising just 0.8% across 2026 and 1.7% in 2027, which leaves buyers with small deposits little cushion in the early years of a loan.
Barclays also offering 5% deposits
Barclays has also reported a big increase in low-deposit mortgage schemes.
The group wrote 4.4% of its new UK home loans above 90% loan to value in the first half of 2026, against 1.6% in the same period last year.
The bank disclosed the shift in its interim results for the six months ended 30 June, which show new home loan bookings rising 14.3% to £17.6 billion from £15.4 billion.
At those proportions, lending above 90% LTV accounted for roughly £780 million of the total, compared with around £250 million a year earlier.
Barclays attributes the increase in bookings to taking a larger share of a larger mortgage market, and says demand for lending above 90% LTV rose within its established risk appetite.
The average loan to value on new lending moved up alongside the volumes. On a balance-weighted basis, it reached 70.2%, from 69.5% in the first half of 2025, and on a valuation-weighted basis it reached 62.2% from 60.7%.
