Britain’s biggest mortgage lender has launched a new deal allowing first-time buyers to get on the property ladder with just a £5,000 deposit – as banks step up efforts to revive the housing market with lower rates.

Lloyds Banking Group, which incorporates Halifax, said the move would open the door to home ownership for thousands who can afford monthly repayments but are locked out by the huge upfront costs of buying. It comes amid a wave of recent mortgage rate cuts from major lenders designed to support first-time buyers, as competition intensifies and expectations grow for further base rate reductions this year.

A foot on the ladder with just £5,000

Under the new deal buyers can purchase a property worth up to £300,000 with a minimum deposit of just £5,000 – equivalent to a 98% loan-to-value (LTV) mortgage. The product, available through Lloyds Bank and Halifax as well as brokers, will launch on May 18 with a five-year fixed rate of 5.89%.

It is aimed squarely at renters who are already shouldering high monthly housing costs but struggle to save tens of thousands of pounds without help from family.

Lloyds said it expects the scheme to deliver an extra £500m of lending to first-time buyers over the next year.

Why are rates easing now?

The launch comes as lenders have been trimming mortgage rates in recent days, with a number of high street banks cutting fixed deals to make borrowing more affordable.

These reductions – alongside fierce competition for new customers – are part of a broader push to help first-time buyers, who have been squeezed by high living costs and rising rents.

Despite this, the deposit hurdle remains the biggest barrier.

Around 64% of aspiring buyers say saving for a deposit is the hardest part of purchasing a home, while only about 40% can rely on family support.

Key features of the new mortgage include:

• Minimum deposit: £5,000
• Maximum LTV: 98%
• Interest rate: 5.89%
• Fixed term: 5 years
• Loan-to-income cap: 4.5x
• Term: up to 40 years
• Fees: none

Strict affordability and credit checks will apply, and the deal is not available for new builds, shared ownership or those using gifted deposits.

Rent vs mortgage: the reality check

Lloyds says the product reflects a growing trend where mortgage repayments are increasingly similar to – or even cheaper than – rents.

In Manchester, one of the UK’s most popular cities for first-time buyers:

• Average first-time buyer property: £236,000
• Monthly mortgage (with £5,000 deposit): about £1,300
• Average rent: £1,347 per month

Over five years, a buyer could build around £11,500 in equity, even if house prices do not rise.

Buyers stuck in a savings trap

Today’s first-time buyer is now aged 32 on average – two years older than a decade ago. While 63% of would-be buyers have already saved more than £5,000, some 58% believe they need over £20,000 before they can realistically buy.

By slashing the upfront requirement, lenders hope to cut years off that timeline.

Amanda Bryden, head of mortgages at Lloyds, said: “We hear time and again from those who are doing everything right… but still feel locked out of home ownership because saving a big enough deposit seems impossible. By cutting the upfront cost to £5,000 we’re breaking down a major barrier.”

Regional house prices snapshot

The affordability challenge varies sharply across the UK. Here is how average first-time buyer property prices compare:

Region	Price10
East Midlands	£204,687
Eastern England	£274,631
Greater London	£464,646
North East	£143,928
North West	£201,120
Northern Ireland	£195,981
Scotland	£168,793
South East	£302,396
South West	£241,949
Wales	£198,283
West Midlands	£219,581
Yorkshire and the Humber	£173,720

Source: Halifax House Price Index, March 2026

The new deal underlines a shift in the mortgage market, with lenders increasingly targeting first-time buyers through a mix of lower rates and innovative low-deposit products.

But while deals like this could help thousands step onto the ladder sooner, borrowers are still being warned to weigh up the risks of high LTV mortgages – particularly if house prices fall.

Rachel Geddes, Strategic Lender Relationship Director, Mortgage Advice Bureau said: “It’s hugely encouraging to see a major high street lender making such a significant commitment to supporting first time buyers. Unlocking up to £500m in additional lending, alongside a £5,000 deposit option, is a positive step towards breaking down some of the barriers preventing aspiring homeowners from getting onto the property ladder.”

Jamie Alexander, Mortgage Director at Romsey-based Alexander Southwell Mortgages, said it was encouraging to see a lender of Lloyds’ size targeting this market.

But he warned: “The £300,000 purchase price cap is worth noting, though. For buyers in many parts of the UK that’s workable, but in London and the South East it will put a significant chunk of the market out of reach, which is arguably where the deposit struggle is felt most acutely.

It’s expected to be another tough year for the UK high street, with a number of big-name brands set to close shops. It comes as a result of increasing business costs and a shift in shopping habits.

According to the Centre for Retail Research, 54 retailers collapsed in 2025, resulting in the loss of 3,080 stores and 30,153 employees. Meanwhile, over 500 bank branches closed for good due to an ongoing shift of customer behaviour, with an increasing number of people choosing to bank online or use mobile app services.

As reported by Time Out, a number of high street closures are already confirmed in 2026. These include retailers such as River Island and banks like Lloyds.

Here is the list of announced closures for 2026 so far.

The following Cancer Research UK stores will close this year. However, no specific closing dates have been provided yet.

Claire’s Accesories plunged into administration at the end of last year and stores remain under threat of closure in 2026.

Despite being acquired by investment firm Modella Capital, the chain could not make a successful comeback and is now on the look out for a buyer.

However, if a buyer isn’t found then all 150 stores across the UK could shut.

Like Claire’s, The Original Factory Shop fell into administration in 2025 and was acquired by Modella Capital.

However, it is yet to find a buyer with all 140 UK branches facing closure.

Approximately 28 million banking customers could be impacted by a spate of closures set to occur in 2026. Lloyds Banking Group has already confirmed the closure of 40 Lloyds branches and 15 Halifax branches across the UK.

This means that many people in the affected regions will no longer have access to local branch services, such as cashing cheques and depositing or withdrawing money. However, there are still options available for those affected to meet their banking needs.

Lloyds Bank has provided guidance indicating that many customers will still have access to banking hubs, with potential plans for new ones following the closures. These banking hubs, owned by Cash Access UK and operated by the Post Office, are shared spaces where customers from various banks can perform a range of tasks, including balance checks and cheque deposits.

This move is part of a wider trend of major banks shuttering branches nationwide, citing that the majority of their customers now conduct most of their banking online or via banking apps. According to Lloyds Banking Group, over 21 million customers now prefer managing their finances through online applications.

A spokesperson for Lloyds Banking Group commented: “We’re providing more choice than ever before, bringing together the best in digital convenience with our people.”

Below is the complete list of Lloyds and Halifax branch closures scheduled throughout 2026

Lloyds

• January

  • Gillingham (Dorset) – January 8

  • Mitcham – January 8

  • Totnes – January 8

  • Ammanford – January 12

  • Bideford – January 13

  • Fleet – January 13

  • Chester-Le-Street – January 14

  • Ivybridge – January 14

  • News Addington – January 14

  • Alfreton – January 19

  • Havant – January 19

  • Lewes – January 19

  • Swadlincote – January 20

  • Penzace – January 21

  • Petersfield – January 21

  • Southampton Hedge End – January 21

  • Hedon – January 28

  February

  March

  • Leominster – March 3

  • Peterlee Yoden Way – March 3

  • Hucknall – March 4

  • Brigg – March 5

  • Caterham – March 5

  • Falmouth – March 5

  • Glossop – March 9

  • Tunstall – March 9

  • Houghton-le-Spring – March 10

  • Manchester Moston – March 11

  • Seaton – March 11

  • Sleaford – March 12

  • Wymondham – March 12

  • Okehampton – March 25

  October

• Camborne – October 7
• Chepstow – October 7
• Ryde – October 7
• Deal – October 8
• Harborne – October 8
• Gorseinon – October 12
• Southampton Totton – October 12
• Stamford – October 13

A full review of these closures can be found on the Lloyds Bank website here.

Halifax

• Middleton – January 8
• Yeovil – January 12
• Havant – January 15
• Wansworth – January 15
• Seaford – January 19
• Deal – January 22
• Hastings – January 22
• Skipton – January 26
• Horsforth – February 24
• Birmingham Bearwood – March 2
• Peterlee – March 3
• Nelson – March 4
• Sleaford – March 12
• Camborne – October 7
• Buxton – October 13

A full review of these closures can be found on the Halifax Bank website here.

If you are affected by the changes and are concerned you won’t be able to carry out banking services that you need to online, you may still be able to access a physical banking hub in your local area to replace your physical bank branch. A full list of banking hubs across the UK can be found online here.

In a significant blow to the high street, another 24 bank branches are set to close across the country next month. This latest wave of closures will see Lloyds Bank, along with other high street banking giants, shuttering branches from Bristol to Sheffield.

Barclays, NatWest, Halifax, Santander and Bank of Scotland are also among the banks included in these closures. The move will disrupt access to in-person banking for millions of customers.

According to consumer champion Which?, banks and building societies have closed 6,443 branches since January 2015, averaging at 53 closures every month. Starting next month, Lloyds Bank will axe 17 more branches, including those in Bristol Bishopsworth and Manchester Newton Heath.

Two more Bank of Scotland branches, as well as three Halifax branches, will also close their doors for good. Barclays, NatWest and Santander will each respectively close a branch come November.

After closing 32 branches last month, Lloyds is set to close additional branches in major locations such as Sheffield and Bristol. Data collected by consumer magazine Which? reveals that around 6,300 bank and building society branches have closed in the UK since January 2015, representing 64% of branches that were open a decade ago.

Since the announcement of each closure, 1,879 bank branches have either shut down or declared their intention to do so. This equates to an average of roughly 50 closures announced per month since February 2022, or 12 per week.

However, the rate of closures may be decelerating. The number of annual closures has dropped from a recent high of 633 in 2023, to 399 last year and 364 scheduled to close by the end of 2025.

Autumn closures have consistently decreased from 223 between September and November in 2022, to 191 in 2023, 111 last year, and 70 this autumn. A recent report issued by the House of Commons Library stated that the provision of cash and banking services had declined partly due to “changing consumer behaviour” and the shift towards online banking and digital payments.

However, the report also highlighted that the reduction was being “driven by industry changes such as the reduction in the amount ATM operators earn when ATMs are used”. It further noted: “A reduction in cash and banking service availability falls hardest on some of the more vulnerable groups in society including the elderly, digitally excluded people and those with low incomes.”

Additionally, a reduction in banking services can make it harder for businesses to process cash, potentially leading some to stop taking cash as payment.

This can in turn lead to further difficulty for people who rely on cash.

Bank closures in November

Lloyds Bank

Biggleswade – November 5

Blandford – November 10

Bristol Bishopsworth – November 6

Chard – November 11

Coventry Foleshill – November 4

Dunstable – November 4

East Grinstead – November 12

Feltham – November 4

Ferndown – November 17

Hexham – November 5

Loughton – November 12

Manchester Newton Heath – November 5

Plymstock – November 4

Pontardawe – November 20

Sheffield Woodhouse – November 11

Shipston-on-Stour – November 11

Bank of Scotland

Moffat – November 19

Thornhill – November 3

Barclays

Northampton Wellingborough Road – November 28

Halifax

Bolton – November 20

Hexham – November 10

Wickford – November 10

NatWest

Garstang – November 10

Santander

Surrey Quays – November 10