Back in August last year, we reported on the signs that first-time buyer activity was picking up in the UK. Now, with fresh data confirming a 20% surge in first-time buyers in 2024, it’s clear that this trend has gained serious momentum. But what’s driving this increase? And does it mean buying a home is getting any easier? Let’s take a closer look.
A Record-Breaking Year for First-Time Buyers
According to new data from Halifax, a staggering 341,068 first-time buyers secured a mortgage in 2024—up 19% from 2023. Even more significantly, first-time buyers made up 54% of all mortgage-backed property purchases, the highest proportion since records began in 2014.
This rise follows two years of declining first-time buyer numbers, largely due to economic uncertainty, high mortgage rates, and affordability struggles. But 2024 marked a turning point.
What’s Behind the First-Time Buyer Boom?
Several key factors contributed to this surge in first-time purchases:
✔ Lower Mortgage Rates: Mortgage rates peaked in mid-2023, but as the Bank of England cut interest rates, lenders followed suit. Now, some fixed-rate mortgage deals are dipping below 4%, making borrowing cheaper.
✔ More Confidence in the Market: After months of uncertainty, many buyers felt reassured by stabilising rates and clearer financial conditions.
✔ Joint Purchases on the Rise: Buying alone has become increasingly difficult, but nearly two-thirds of first-time buyers in 2024 bought with someone else—whether a partner, friend, or family member.
✔ End of Stamp Duty Holiday Effect: Some experts believe that the rush to buy may have been boosted by buyers looking to complete before the stamp duty holiday ended in March 2024.
Does This Mean Homes Are More Affordable?
Not necessarily. While mortgage rates have dropped, affordability remains a huge hurdle.
Bigger Deposits Needed: The average first-time buyer deposit hit £61,090 in 2024—£7,500 more than the previous year.
London’s Deposit Challenge: In the capital, where property prices are sky-high, first-time buyers needed an average deposit of £125,000.
House Prices Still Rising: The average price of a first-time buyer home was £311,034 in 2024, an 8% increase from the previous year.
First-Time Buyers Getting Older: The average age of a first-time buyer is now 33, the highest in 20 years.
So while lower mortgage rates have made borrowing more manageable, the upfront costs—particularly deposits—remain a barrier for many.
How Are First-Time Buyers Funding Their Deposits?
With deposit requirements growing, it’s no surprise that more buyers are leaning on family financial support:
- 31% of first-time buyers in 2024 received help from family or friends with their deposit—up from 22% in the mid-1990s.
- 9% of buyers used inheritance money to boost their deposit savings.
This trend raises concerns about housing inequality, as those without family support face greater challenges in getting on the property ladder.
Will First-Time Buyer Growth Continue in 2025?
The big question now is whether this first-time buyer surge will continue into 2025. Here’s what to watch:
- Further Rate Cuts? The Bank of England is expected to cut rates again, which could make mortgages even cheaper.
- House Price Trends: If house prices rise further, affordability issues could slow first-time buyer activity.
- Government Support: Calls for more affordable housing and new buyer incentives are growing.
While falling mortgage rates are a positive sign, real affordability improvements—especially around deposits—will be key in determining whether first-time buyer numbers keep rising.
A Step Forward, but Challenges Remain
2024 was a big year for first-time buyers, and we’re thrilled to see more people getting onto the ladder. However, affordability remains a major issue, and many buyers still rely on family support.
For those looking to buy in 2025, the good news is that mortgage rates are improving, but saving for a deposit remains tough. The key takeaway? Preparation is everything—start exploring mortgage options early, boost savings where possible, and keep an eye on market trends.
Thinking about buying your first home? A mortgage broker can help you find the best deals and navigate the process smoothly. Feel free to reach out for expert advice!
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Disclaimer:
This article is for general guidance purposes only and does not constitute legal, financial, or professional advice. Mortgage products and their terms can vary, and it is important to seek advice from a qualified, regulated professional who can assess your individual circumstances. Please ensure you consider your unique needs before making any financial decisions.
While every effort is made to ensure that the information provided on this blog is accurate and up-to-date, we do not guarantee its completeness or accuracy. The mortgage market can change rapidly, and the information on this blog may become outdated. We recommend verifying any information before acting on it and seeking tailored advice.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
