Despite higher prices in many areas, improved mortgage affordability means they’re making up the biggest share of home purchases across the UK.
According to our latest research, the average price of a first home now stands at £229,000 - up 2.4% over the last year. That rise outpaces the wider housing market, which grew by 1.3%. In other words, first-time buyers are driving activity more than any other group.
Borrowing power boosts first-time buyers
The main reason is borrowing power. Thanks to improved mortgage affordability over the past six months, buyers can now borrow around 20% more than before. That’s sparked a 30% jump in first-time buyer mortgages, helping thousands onto the ladder.
First-time buyers now account for 39% of all property sales and nearly half of all new mortgages (49%). It’s no surprise then that they’re shaping the market more than ever.
What are first-time buyers buying?
The three-bedroom house is the most popular choice, attracting 45% of first-time buyers. Flats, on the other hand, are slipping in demand, now accounting for just 29% of first-time buyer enquiries outside London.
Regional price trends: winners and strugglers
Across most of the UK, first-time buyer prices are rising faster than the overall market. The stand-out is the North East, where first-home prices have jumped 10.2% in the past year, compared with 2.4% for all homes. Scotland, Yorkshire and the Humber, and the North West are also seeing above-average growth.
In contrast, London tells a different story. With high stamp duty and tougher affordability, the average first-home price in the capital has actually fallen by 2.4% over the year. To make ends meet, London’s buyers are targeting homes priced well below local averages – typically around 21% cheaper.
Region | Avg first-time buyer house price growth | Avg house price growth of all homes | Avg cost of first-time buyer home | Avg cost of all homes | Price difference (%) |
North East | 10.2% | 2.4% | £134,800 | £146,600 | 8% |
Scotland | 6.4% | 2.1% | £146,600 | £170,500 | 13% |
Yorkshire & Humber | 6.0% | 1.9% | £167,700 | £192,500 | 15% |
Wales | 4.0% | 2.1% | £172,800 | £207,209 | 17% |
North West | 5.1% | 2.7% | £179,300 | £201,281 | 11% |
West Midlands | 2.7% | 1.6% | £208,000 | £233,902 | 11% |
East Midlands | 1.7% | 1.0% | £210,000 | £231,006 | 9% |
South West | 1.9% | 0.3% | £245,000 | £312,006 | 21% |
Eastern England | 0.7% | 0.8% | £316,900 | £337,498 | 6% |
South East | 2.7% | 0.2% | £323,300 | £385,257 | 16% |
London | -2.4% | 0.2% | £420,600 | £534,038 | 21% |
UK | 2.4% | 1.3% | £229,000 | £268,449 | 15% |
Affordability gap shapes choices
On average, first-time buyers look for homes about 15% below the local market price. That discount grows in regions where affordability is tight, such as the South East (21%), Wales (17%), and of course London (21%).
Richard Donnell, our Executive Director, says this variation reflects how affordability shapes buying decisions. “First-time buyers have had a 20% boost to affordability over the last six months. This is enabling them to look at higher-value homes in the more affordable parts of the country. In contrast, in London and southern England, affordability remains a big challenge, so buyers are seeking cheaper options despite the extra borrowing capacity.”
What it means for first-time buyers
Whether prices are climbing or easing, first-time buyers remain the backbone of the housing market. With greater borrowing power and determination, they’re proving that 2025 could be the year many more step onto the ladder - even if they’re climbing it in slightly different ways depending on where they live.
