The share of first-time buyers (FTBs) using low-deposit mortgages increased by 8.6% in October, according to Barclays.
The data showed more FTBs are getting around cost-of-living pressures by taking on mortgages with smaller deposits.
Deposits under £20,000 made up 22.1% of FTB completions last month, up from 13.5% the year before.
FTBs still made up 36% of its mortgage completions over the past 12 months.
More renters said they needed extra support to buy, with 49% saying a guarantor or family-backed mortgage was essential, compared to 42% in September.
60% of renters said they would need financial incentives or homebuying support schemes, up from 51% in September.
Property prices and high deposits were the main barriers to owning a home, cited by 46% and 39% of renters in October.
Confidence in the UK housing market dropped to 24% in October, down from 27% in September, matching the lowest level since January.
Confidence in household finances stayed higher at 63% but fell 11 percentage points month-on-month.
37% of consumers said they felt confident they could afford to move in the next year.
This rose to 46% among homeowners, who pointed to manageable housing costs and bills as the main reason, followed by secure employment and the ability to sell at a good price.
Only 22% of renters felt confident they could afford to move in the next 12 months, either to buy or continue renting.
The main reasons were cost-of-living pressures, difficulty saving a deposit, and high rents.
Only 4% said recent or upcoming government policies affected their confidence.
Additionally, Barclays data found that mortgage and rental spending was up 5.1% in October compared to last year, as the Bank of England base rate stayed the same.
In response to higher costs, 38% said they were cutting back on small luxuries, while 26% were reducing essential spending.
Jatin Patel, head of mortgages, savings and insurance at Barclays, said: “The increasing appetite for low-deposit mortgages demonstrates that getting on the property ladder remains a priority for renters.
“It also highlights how industry innovation, such as family-backed mortgages and support schemes, is crucial in helping more people responsibly attain their homeownership goals.
“Despite overall confidence in the housing market softening, the appetite for homeownership remains strong.”
Patel added: “The turbulence of the last few years has slightly shifted the consumer mindset, where property is seen less of a ‘rite of passage’, but still considered an important financial milestone for long-term stability.”
Julien Lafargue, chief market strategist at Barclays, said: “With less than a week to go to the Autumn Budget and growing expectations that the Bank of England will lower interest rates once more in December, the UK real estate market appears primed to reaccelerate following a period of stagnation.
“That said, beyond improved economic visibility and slightly lower interest rates, the data shows that addressing the affordability challenge should remain a key priority.”
