The UK housing market has witnessed a significant surge in first-time buyers, with this demographic accounting for 20% of all spending in the year to September, according to analysis by Savills, the property agent. The average first-time buyer borrowed a record-high £210,800 during this period, driven by rising wages and more relaxed affordability tests that have allowed them to purchase properties that were previously beyond their budget.
The trend is particularly pronounced in London, where first-time buyers made more than half of all property purchases this year, according to separate research from estate agent Hamptons. In total, mortgage lenders loaned a record £82.8bn to 390,000 first-time buyers in the 12-month period, a 30% increase on the previous year.
The larger mortgages taken out by first-time buyers reflect a shift in their purchasing patterns, with some skipping the traditional first rung of the property ladder and opting for houses rather than flats. The average age of a first-time buyer is now 34, and 31% have children by the time they get on the property ladder.
Many first-time buyers also took advantage of the stamp duty holiday, which allowed them to pay no tax on the first £425,000 of a property’s value, to buy larger homes. This threshold dropped back down to £300,000 in April. They also benefited from a “buyer’s market,” with prices falling in some parts of the country.
Lucian Cook, the head of residential research at Savills, said a significant driving force behind the record borrowing had also been the “slightly more relaxed approach” of lenders. “Home ownership is more accessible now than at any point in the last three years, thanks to lower borrowing costs, lower real house prices, and more accessible mortgage debt,” he said.
However, the relaxation of lending rules has come at a time when mortgage rates are easing, with an average two-year fix now at 4.91% and a five-year fix at 4.86%, according to Moneyfacts, a financial services provider. These are the lowest rates since before Liz Truss’s disastrous mini-budget in September 2022.
Across Britain, 2025 is ending with average asking prices 0.6% (£2,059) less than late 2024. At £358,138, the average asking price in December is also 1.8%, or £6,695, lower than in November, according to the website Rightmove. Annual growth in asking prices has been strongest in the north-west of England (2.6%), flat in London (0%), and most negative in the south-west and south-east (both at minus 2.7%).
However, Rightmove expects a bigger than usual “Boxing Day bounce” as people who put their home moving plans on hold because of budget uncertainty start looking again after Christmas.