95% Mortgages Return: A Fresh Opportunity for First-Time Buyers in Manchester

In July 2025, the UK government reintroduced its 95% mortgage guarantee scheme, a move designed to give first-time buyers the boost they need to step onto the property ladder. 
Under the scheme, buyers can secure a home with just a 5% deposit, backed by a government guarantee that encourages lenders to offer low-deposit products with competitive rates. It is a timely response to ongoing affordability challenges and rising rental costs, especially for young professionals and graduates living in dynamic city markets like Manchester.

For first-time buyers who have struggled to build a deposit while dealing with rent, rising costs, and wage inflation, this could be a game-changer. Combined with falling interest rates and stabilising property prices, there is now a real window of opportunity to make the leap from renting to owning.

Key Takeaways
 

• The 95% mortgage guarantee scheme returns in 2025, offering lower-deposit options for first-time buyers
   
• Mortgage competition is heating up, with some fixed-rate products now under 4%
   
• Manchester remains one of the UK’s most affordable and high-growth city centre markets
   
• Property prices are still accessible, but demand is expected to rise as the market stabilises
   
• Rothmore Property offers tailored support to help first-time buyers navigate the process confidently

Why This Mortgage Scheme Matters for First-Time Buyers

Saving a deposit has long been one of the biggest hurdles for first-time buyers. Data from Halifax shows that the average deposit for a UK first-time buyer in 2024 was around £53,000, a figure out of reach for many. The 95% mortgage scheme lowers that threshold substantially, helping buyers secure homes with deposits as little as £12,000 to £15,000 depending on the property. 

As inflation eases and fixed rates improve, lenders are becoming more competitive. Halifax recently launched a two-year fixed mortgage under 4%, with Virgin Money and HSBC following suit. These lower rates mean monthly payments become more manageable, making homeownership more realistic than it has been in years. Source: This Is Money

Why Manchester Is Ideal for First-Time Buyers

Manchester continues to outperform much of the UK in terms of economic activity, population growth and property value resilience. With an economy worth over £100 billion and a projected city centre population growth of more than 70,000 by 2030 (ONS), demand for housing remains strong and consistent. It is also more accessible than London. While average London property prices exceed £525,000, Manchester offers one-bedroom and two-bedroom apartments from £200,000 to £425,000 in central zones, particularly in regeneration areas like Ancoats, New Islington and Piccadilly East.

The city is also home to five universities and over 120,000 students, a portion of whom remain after graduation to enter its thriving tech, finance and media job markets. According to UCAS and the Higher Education Statistics Agency (HESA), more than 51% of Manchester graduates stay in the region for work, contributing to a young, professional population base. Ongoing regeneration, including developments like Victoria North, Mayfield and St John’s, continues to lift area desirability and long-term value. This makes it not only affordable for buyers today, but also a smart long-term move.

How the 95% Mortgage Works

The 95% mortgage guarantee scheme allows lenders to offer loans to buyers with just a 5% deposit, as the government guarantees a portion of the mortgage to reduce lender risk. Here is a basic example:

• Property price: £260,000
   
• Buyer deposit (5%): £13,000
   
• Mortgage (95%): £247,000
   
• Estimated monthly repayments at 4.5% fixed approx £926pm (4.5% of £247,000)

These products are available through major lenders, but borrowers must pass affordability checks. Rothmore Property works closely with mortgage advisers to help buyers assess eligibility and select the best mortgage deal for their financial goals.

A Safer Lending Landscape Today

There are natural concerns when it comes to low-deposit borrowing, especially after the 2008 financial crash. However, today’s lending environment is significantly more regulated. The Financial Conduct Authority requires banks to conduct stress tests based on future interest rate scenarios, and affordability assessments include detailed analysis of income and expenditure.

Furthermore, average earnings in Manchester have increased steadily, with the latest ONS data showing a 5.2% rise in average full-time pay in the North West over the past year. When combined with softening house prices, this shift makes property more accessible than it has been in recent years. Most importantly, Manchester’s resilient demand profile, underpinned by consistent student inflows, job creation and major investment projects, helps reduce the risk of negative equity in well-located, high-demand areas.

Why Acting Now Could Pay Off

With mortgage competition increasing and rates becoming more competitive, buyers who act early stand to secure better deals. As demand from first-time buyers and home movers returns to the market, property values are likely to begin rising again, particularly in strong urban centres. Source: Bloomberg

In fact, analysts from Knight Frank forecast that UK house prices could rise by 3% to 5% in 2025 as confidence rebuilds. For first-time buyers, purchasing now means avoiding that next price climb and benefiting from improved financing terms while they are still available.

Why Rothmore Property Is the Right Partner for First-Time Buyers

At Rothmore Property, we are proud to help first-time buyers take that critical first step into homeownership. We simplify the process from start to finish, helping you navigate mortgage approvals, find the right home, and move forward with confidence. Here is what we offer:

• A curated list of developments in Manchester with units eligible for 95% mortgage financing
   
• One-on-one consultations to explain affordability, budgeting and borrowing
   
• Introductions to reputable mortgage brokers and solicitors familiar with first-time buyer needs
   
• Full support through reservation, exchange and post-completion services Our mission is to turn your first property into a lasting success, backed by real market knowledge and long-term care.

Final Word

The return of 95% mortgages in 2025 offers a practical boost for renters and first-time buyers ready to step onto the property ladder. It's a timely opportunity for those eager to transition from renting to owning in cities like Manchester, where demand and value are aligned. With Manchester offering a rare combination of affordability, regeneration and job growth, the time to act is now before prices rise and competition increases.

According to Bloomberg, the housing market is showing signs of renewed stability, while Knight Frank’s forecasts of 3% to 5% price growth suggest a market on the rebound. Manchester, with its £70 billion economy and youthful, professional population, continues to stand out as one of the UK’s most dynamic cities. For those ready to take the leap, this is the window to secure a home before momentum builds.

Mortgage deals are improving, lenders are opening up to more applicants and expert support is available every step of the way. Add in the government’s backing through the 95% scheme, and this summer could mark the start of a new chapter for many first-time buyers.