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The number of UK first-time buyers jumped by almost 20 per cent last year and accounted for a record share of new home mortgages, according to research that points to the impact of easing borrowing costs on demand.
Some 341,068 first-time purchases were made in 2024, up 19 per cent from 2023, the lender Halifax said on Friday, after two years of contraction. The figures are based on UK Finance data on transactions with a mortgage.
First-time buyers accounted for 54 per cent of all property purchases involving a mortgage, the highest proportion since comparable data collection began in 2014, Halifax said.
It added that many first-time buyers had made their purchase “coupled up”, with almost two-thirds of mortgage completions among this cohort last year made in two or more names.
Amanda Bryden, head of mortgages at Halifax, said the jump in first-time purchases probably reflected “an improvement in mortgage affordability, as interest rates eased and stabilised, providing more certainty for those stepping on to the ladder”.
Mortgage rates have fallen from their peak in the summer of 2023 following a drop in Bank of England interest rates, leading to a reduction in monthly payments.
Barclays and Santander announced mortgage products on Thursday with rates below 4 per cent for the first time since November, and the BoE is expected to cut its benchmark rate further this year.
Toby Leek, president of NAEA Propertymark, which speaks for estate agents, said the rise in the number of first-time buyers was “positive” but added that the figure had probably been boosted by the end of the stamp duty holiday in March.
“In order to get people across the country on to the housing ladder in the long term, we need to start to see more homes of all types and tenures being built to bring down house prices,” he said.
Despite the fall in mortgage rates, Halifax reported serious affordability challenges, with the typical new buyer having to put down a deposit of £61,090 in 2024, about £7,500 more than the previous year.
In London, where the average house costs £512,000 and housing demand is particularly acute, the typical first-time buyer deposit hit £125,000.
The average cost of a UK first-time buyer’s home was £311,034 in 2024, up 8 per cent from the previous year, and the average first-time buyer was 33 last year, the highest age in the past two decades, Halifax said.
In the financial year to March 2024, 31 per cent of first-time buyers said family and friends had offered “some assistance” with a deposit, up from 22 per cent in the mid-1990s, according to separate data from building society Nationwide.
Another 9 per cent of first-time buyers’ deposits were secured via inheritance.
