---
title: No-Deposit Mortgages Return as Housing Crisis Deepens for First-Time Buyers
description: Debate heats up as lenders offer 100% mortgages for 1st-time buyers. Rising concerns echo pre-2007 practices. Prospective measures in UK housing market.
author: Darie Nani (Editor-in-Chief)
date: 2025-05-22T12:07:05.000Z
updated: 2026-02-26T18:02:22.860Z
canonical: https://www.sovereignmagazine.com/article/no-deposit-mortgages-return-as-housing-crisis-deepens-for-first-time-buyers
image: https://cdn.nanimediahouse.com/s-u8ingir1w.jpg
categories: Real Estate
content_type: News
region: United Kingdom
publication: Sovereign Magazine
---

As new lenders introduce 100% mortgages for first-time buyers, industry experts express mixed reactions about the return of no-deposit home loans to the British property market. These products aim to address the mounting challenges faced by Generation Rent, though some observers draw concerning parallels to pre-2007 lending practices.

Gable Mortgages has become the second lender in 2025 to launch a no-deposit mortgage product, following April Mortgages’ similar offering last week. The move marks a significant shift in the market, where most lenders typically require at least a 5% deposit.

Justin Le Roux, chief executive of Gable Group, highlights the rationale behind the new product: ‘There is a whole generation of renters out there who are struggling to save to buy and pay their rent at the same time. This has made it significantly harder for first-time buyers, especially key workers get onto the property ladder.’

## The Growing Deposit Challenge

Recent data from Halifax reveals the scale of the challenge, with the average first-time buyer deposit now reaching £53,414 – a 67% increase over the past decade. According to Lloyds Banking Group research, only 8% of non-homeowners aged 25-34 have sufficient savings for a 10% deposit on the average first-time buyer property in their region. This trend has led many to question whether [the British obsession with home ownership pays off](https://www.sovereignmagazine.com/article/rent-or-buy-does-the-british-obsession-with-home-ownership-pay-off).

## Costs and Considerations

The new offerings present both opportunities and risks for aspiring homeowners. Gable’s standard mortgage offers a five-year fixed rate of 5.95%, while their new-build option stands at 5.65%. These rates exceed those available to buyers with deposits – Monmouthshire Building Society offers a five-year fix at 4.75% for those with a 5% deposit.

For a £200,000 mortgage over 30 years, monthly payments would be £1,193 on Gable’s standard no-deposit product, compared to £1,043 with Monmouthshire’s 5% deposit mortgage. As [mortgage rates continue to fluctuate](https://www.sovereignmagazine.com/article/mortgage-rates-dip-below-7-a-glimmer-of-hope-for-homebuyers), these differences in monthly payments become increasingly significant for buyers.

## Industry Perspectives

Industry professionals remain divided on the merits of these products. Kylie-Ann Martin, mortgage broker at KAG Financial, sees potential benefits: ‘I truly believe there is a place for 100% mortgages, if they are regulated in the right way. We speak to many people paying huge amounts of rent that would see a considerable reduction in costs when comparing this to a mortgage.’

However, Kundan Bhaduri of The Kushman Group warns of potential risks, drawing parallels to past market instability: ‘Gable and April Mortgages’ zero-deposit products bear striking resemblance to Northern Rock’s pre-2007 folly that culminated in Britain’s first bank run since 1866 and left millions in negative equity.’

## Product Details and Restrictions

The products come with notable restrictions and costs. Gable requires borrowers to be at least 23 years old and borrow a minimum of £125,000. Their fee structure is significantly higher than market norms, ranging from £2,095 for properties worth £125,000-£200,000 to £9,995 for homes valued between £800,000 and £1 million.

For key workers in certain professions, Gable offers enhanced borrowing capacity of up to 5.5 times salary, compared to the standard 4.49 times. This means a key worker earning £40,000 annually could potentially purchase a property worth £220,000 without savings.

As [housing market stability continues to evolve](https://www.sovereignmagazine.com/article/housing-market-stability-emerges-as-foreclosure-activity-returns-to-pre-pandemic-levels), these new mortgage products represent an attempt to address affordability challenges. However, prospective buyers must carefully weigh the higher costs and potential risks against the immediate benefit of homeownership without a deposit.

This modest but significant uptick