First-Time Buyer Trends

The journey onto the property ladder is a significant milestone for anyone. For first-time buyers, the property market is constantly evolving. This article delves into the current state of the UK’s first-time buyer market.

Here, we will identify some key first-home trends, persistent challenges, and behavioural shifts among people making their first-ever property investment and becoming homeowners.

The property market in the UK is dynamic and shaped by things such as economic shifts, evolving lifestyles, and technological advancements. According to research by Lloyds Bank, there was a noticeable increase in first-time buyers between the years 2023 and 2024, with a total of 341,068 individuals securing their first property.

This number marks a 19% increase from the previous year (2022-2023), indicating a resilient and active interest in homeownership despite ongoing challenges.

According to government statistics, in 2023-2024, the average age (mean) of all first-time buyers in England was 34 years old.

This shows a slight increase from the age of 31, which was the average first-time buyer age a decade ago. This higher age reflects the longer time it now takes to save up for a deposit and navigate the property market conditions.

There are several factors that are influencing these changes, including fluctuating house prices, wage growth, interest rates, and societal shifts in work and living preferences.

Affordability and Financial Barriers

Affordability is the main hurdle for aspiring homeowners. According to Yopa, between 2014 and 2024, median gross earnings in the UK rose substantially by roughly 43%.

The average earnings rose from about £22,000 to £31,600 in this timescale. However, house prices have also risen significantly, impacting the house price-to-earnings ratio. According to the Office for National Statistics (ONS), the average household disposable income was £35,000 during the financial year ending 2023 in England, and the average house price in this period was £298,000.

This means that buying an average home in England in 2023 costs around 8.6 years of the average household’s disposable income. This is nearly double the ratio in 1999, demonstrating a long-term trend of housing becoming less affordable relative to incomes, even with the recent growth in earnings.

Inflation and rising interest rates have also further affected housing affordability, affecting mortgage approvals. According to Lloyds Bank, the average nationwide property price for a first-time buyer in 2024 was £311,034, an 8% increase from the previous year.

Also, with deposits averaging 20% of the purchase price, new buyers in 2024 were typically putting down a mortgage deposit of £61,090, which is around £7500 (+14%) more than in 2023, further showing the affordability difficulties that new homebuyers face.

According to Unbiased, regional variations are also significant. For example, deposits in Greater London are £151,731 on average, whereas deposits are around £30,679 in the North East on average.

The government scheme aimed at assisting first-time buyers has played a crucial role, and its impact continues to evolve. The Help to Buy: Equity Loan scheme is a great example of this.

According to government figures, between 1 April 2013 and 31 March 2023, 387,091 properties were bought with an equity loan and 328,242 of those were purchased by first-time buyers.

The total value of these equity loans so far totals £24.7 billion, showing just how substantial government help is when it comes to first-time buyers.

Shifts in Location Preferences

The escalating costs of living in major cities are driving a noticeable shift in where first-time buyers are choosing to purchase a home. Many first-time buyers are moving away from the traditional city hotspots in favour of more affordable regions and commuter towns.

Rightmove data from May 2025 reveals that Glasgow tops the list as Britain’s most in-demand city for first-time buyers, with an average asking price of just below £149,000.

Other Northern cities like Manchester (£210,685), Leeds (£182,420), Sheffield (£151,066), and Liverpool (£145,457), also feature in the top ten, showing a clear trend towards areas that have a lower average property price compared to the national average of £228,551 for a typical first-time buyer property (two bedrooms or fewer).

Even in London, first-time buyers are actively looking at more affordable areas such as Croydon (£301,606), Sutton (£318,881), and Bromley (£366,177), but these prices are still significantly higher than the national average.

Property Types and Priorities

The modern UK housing market is causing first-time buyers to compromise on their home choices. According to Financial Reporter, a recent poll by Skipton Building Society indicates that 70% of first-time buyers are willing to compromise on factors such as the size of the garden, the location of the home, and the number of bedrooms in order to achieve homeownership.

This willingness often results in a preference for smaller homes. The survey of people looking to purchase their first property indicates that 34% expect to own a semi-detached property, 25% expect to own a flat, and 21% expect to own a terraced house.

Beyond the size and type of properties, the highest priorities for new homeowners also extend to amenities, energy efficiency, and outdoor space. The increasing awareness of climate change and rising utility costs suggest a growing demand for energy-efficient properties. The modern trends in remote working have also increased the desire for outdoor space or dedicated home office areas.

Lifestyle & Work Trends

The rise of remote working and hybrid work models that have been significantly accelerated by the pandemic is having a big impact on homebuyer decisions.

The Chartered Institute of Personnel and Development (CIPD) reports that their recent Labour Market Outlook survey found that the number of people working from home is still widespread. Almost half (41%) of employers allow hybrid working with formalised policies in place.

One in five (19%) employers also have informal practices between managers and employees, with a modest proportion (15%) who believe they are currently in the testing and learning stage. This shows that there is a huge proportion of workers who are now working from home, a substantial increase from the days gone by.

This flexibility has allowed many first-time buyers to consider properties further away from the city centres, often where prices are lower and there is more space available.

This shift in working patterns has also led to an increased interest in homes with dedicated office spaces or the potential for conversion. It has also led to an increase in the appeal of rural and suburban areas.

While this has initially driven people to choose to buy outside of cities, there is also a recent trend of increased rental demand in major cities as some companies reduce flexible work policies.

Cultural Influences & Online Behaviour

The rise of the digital age has reshaped how first-time buyers are approaching their property buying journey. Social media platforms such as Instagram, TikTok, and YouTube, as well as property influencers, are increasingly reshaping expectations and providing key information for those navigating the property industry for the first time.

A report by MoneyAge reveals some interesting statistics from a survey by Wayhome of first-time buyers.

The results of the survey revealed that 25% of respondents had used a social media platform for advice during the initial process of purchasing their property. The most popular social media platform for this was Facebook, followed by Instagram and then TikTok.

The survey also revealed that, once first-time buyers had achieved homeowner status, 84% utilised social media for advice, hacks and guidance on homeownership.

Content creators often offer authentic insights into buying your first home, DIY projects, and home interior design, influencing tastes and informing decisions. Many new-build developers are also engaging with influencers to showcase their available properties.

This shows the power of social media platforms when it comes to reaching the younger, digital-savvy generations who have grown up with these platforms.

Outlook and Predictions

The outlook for first-time buyers in the UK in 2025 presents both opportunities and ongoing challenges. House prices are generally expected to increase slightly. The Home Owners Alliance reports that house prices are predicted to increase by 2-4% in 2025.

It is stated that this house price forecast has improved since the end of last year. In the Office for Budget Responsibility’s Economic and Fiscal Outlook March 2025 report, it is stated that it expects a house price growth of 2.8% in 2025, which is an increase from its forecast in October 2024 that prices would increase by an average of 1.1% in 2025.

This just shows the unpredictability of the housing market in today’s times.

Policy changes will also shape the future of the market. For example, stamp duty thresholds were reduced in April 2025, from £425,000 to £300,000 for first-time buyers, as reported by Natwest. This could influence market activity.

Interest rate projections are also a key factor. While the current rates are higher than the low rates of previous years, there is an expectation for further base rate cuts this year, which could slightly reduce borrowing costs and may help to improve mortgage affordability.

According to Fox Davidson, an award-winning mortgage advice company, the best two-year fixed rate mortgage is currently around 4.20%, and five-year fixes are about 4.07%.

They report that these rates are expected to dip slightly if the Bank of England cuts rates, and report a potential drop of two-year fixes to around 3.5% by the end of the year. Lenders are also considering relaxing stress-testing rules, potentially increasing how much first-time buyers can borrow.

Housing supply still remains a critical issue. The government’s commitment to building 1.5 million new homes over five years aims to increase housing supply, and this could help to improve average house prices.

The anticipated slight easing of getting a mortgage for first-time buyers and the increased housing supply could help to provide some relief to first-time buyers and may lead to an increase in first-time buyer activity in certain areas.