New £5,000 Deposit Mortgage Opens the Door for First-Time Buyers in the South West

- Tue 19 May 2026

A new mortgage scheme launching this month could significantly reduce one of the biggest barriers to homeownership – the deposit.

Lloyds Banking Group has announced a new product allowing first-time buyers to purchase a property with a deposit of just £5,000, available on homes up to £300,000 from this Monday 18th May 2026.

With borrowing of up to 98% loan-to-value and no product fees, the scheme is designed to help renters who can afford monthly repayments but have struggled to save a traditional deposit.

What Deposit Does a First-Time Buyer Typically Need?

Using the South West first-time buyer average of £241,949:

• A standard 5% deposit would require around £12,097
• Many buyers aim for 10%+ (£24,000+) to access better rates
• In reality, average deposits in the South West can be even higher, often exceeding 20% (£50,000+), reflecting affordability pressures.

This illustrates why saving a deposit is widely seen as the biggest barrier to getting onto the property ladder.

What This Means in Devon, Somerset and Cornwall

While first-time buyer prices vary locally, they broadly align with or sit slightly below the regional average:

• Devon – broadly in line with regional FTB pricing (~£240k–£250k range)
• Somerset – often slightly higher, reflecting strong demand (~£250k+)
• Cornwall – typically lower, with FTB purchases often closer to £227,000

Based on these realistic first-time buyer values, typical deposit expectations would be:

• Around £12,000–£13,000 for a 5% deposit
• Around £24,000–£26,000 for a 10% deposit

These are significant sums, especially for buyers also managing rent and everyday living costs.

The Opportunity: A £5,000 Deposit

This is where the new Lloyds product represents a major shift.

With a fixed minimum deposit of just £5,000, buyers purchasing within the scheme limits could:

• Reduce their upfront deposit by over £7,000 compared to a typical 5% deposit
• Potentially buy years earlier than expected
• Keep more savings available for legal costs, moving costs and furnishing their new home

For many first-time buyers, this could be the difference between waiting and buying now.

Is It Right for Everyone?

Low-deposit mortgages can be a powerful solution, but they aren’t suitable for every buyer.

Higher loan-to-value borrowing can mean:

• Slightly higher interest rates
• Larger monthly payments
• Greater exposure if house prices fluctuate

That’s why making the right choice from the outset is so important.

How Bradleys Mortgages Can Help

At Bradleys Mortgages, we’re here to help first-time buyers navigate these decisions with confidence.

David Lewis, Head of Bradleys Mortgages explains:

“When looking at each mortgage situation there isn’t a one-fits-all scenario, therefore my team and I are here to help find each person the right mortgage for their situation and we have over a hundred lenders to choose from to ensure we can do that. Regardless of who or where you are buying your first home through, my team can help and would welcome your call.”

And as part of Bradleys Estate Agents – the largest independent estate agency in the South West, with over 30 offices across Devon, Somerset and Cornwall, we can also offer:

• Access to the largest selection of homes in the region
• Local expertise to guide you on the best areas and opportunities
• Support throughout your entire home-buying journey

Your First Home Could Be Closer Than You Think

For many first-time buyers, the challenge has never been affordability of monthly payments – it’s been saving the deposit.

With the introduction of innovative products like this, alongside expert local support, there has never been a better time to explore your options.

If you’re thinking about buying your first home, Bradleys Mortgages would be delighted to help you take that first step – from understanding what you can afford, through to finding and securing your ideal property.

Contact the Bradleys Mortgages team.