Improved affordability for first-time buyers boosts house prices by up to 10 per cent
First-time buyers (FTBs) are looking to buy more expensive homes than a year ago by up to 10 per cent in the most affordable regions
First-time buyers are the largest group of home buyers, accounting for 39 per cent of all sales and half (49 per cent) of all new mortgages for home purchase
The average price of a FTB home is £229,000 which is 2.4 per cent higher than a year ago. This is above the 1.3 per cent increase in overall UK home prices
In the North East FTBs are looking to buy homes 10.2% higher than a year ago, but in London affordability pressures and higher stamp duty means lower prices
First-time buyers typically target homes priced 15 per cent below average prices within local areas with this rising to 21 per cent in London, the South East and 17 per cent in Wales
London: New analysis(1) from Zoopla, one of the UK’s leading property websites, reveals that first-time buyers are looking to buy more expensive homes than they were one year ago, by up to 10 per cent in more affordable regions like the North East. Higher stamp duty costs are impacting those in more expensive markets like London and the South East where they are looking to buy homes 2.4 per cent cheaper than they were a year ago.
Mortgage affordability has improved over the last six months which has delivered a 20 per cent boost to borrowing power. This has supported a 30 per cent increase in first-time buyer mortgages between H1 2024 and H1 2025 and resulted in first-time buyers looking to buy more expensive homes than they were a year ago.
First-time buyers are a significant group in the property market, accounting for 39 per cent of all sales each year and half of all new mortgages for home purchases (49 per cent)(2). Zoopla’s data shows first-time buyers are primarily focused on buying three-bedroom houses (45 per cent), while interest in flats is decreasing (29 per cent).
First-time buyer house price growth is outpacing the overall market
The price of homes first-time buyers are looking to buy are rising faster than the wider overall market, 2.4 per cent vs 1.3 per cent. This is the case for the vast majority of the UK, in fact first-time buyer price growth is higher than the average growth for all homes in nine out of 11 UK regions.
In contrast, affordability pressures and higher stamp duty costs are seeing first-time buyers target lower value homes in London (-2.4 per cent), with first-time buyers targeting similar priced homes to a year ago across southern England.
The North East has seen the most significant difference, with first-time buyer targeting homes that are 10.2 per cent higher than a year ago, with the overall market registering a 2.4 per cent increase over the last year.
Other strong performers include Scotland (6.4 per cent vs 2.1 per cent), Yorkshire & Humber (6.0 per cent vs 1.9 per cent) and the North West (5.1 per cent vs 2.7 per cent).
Table 1: First-time buyer house price inflation by region
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% |
Source: Zoopla Research 2025 - 12m to July 2025 - based on individual FTB enquiries to estate agents about specific homes for sale on Zoopla.
Driven by the reality of affordability, first-time buyers typically target homes priced 15 per cent below average prices within local areas with this rising to 21 per cent in London and the South East, and 17 per cent in Wales. In these regions, first-time buyers must aim for a larger price difference to secure a home that aligns with their income and mortgage eligibility.
Richard Donnell, Executive Director at Zoopla comments: “First-time buyers have had a 20 percent boost to affordability over the last six months. This is enabling them to look at buying higher value homes in the more affordable parts of the country. In contrast, first-time buyers in London and southern England are looking for cheaper homes than a year ago despite the extra borrowing capacity. Higher levels of stamp duty since April haven’t helped. Large deposits and mortgage regulations mean a high household income is needed to buy in southern England where affordability remains a challenge.
“The variation in affordability explains why first time buyers across England are looking to buy three bed houses while in London, one and two bed flats remain the primary target for those buying their first home.”
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Notes to Editors
Zoopla’s analysis of the asking prices that are most popular amongst first-time buyers, comparing Jul 2025 to Jul 2024. Figures are stock-adjusted. Average house price data comes from Zoopla’s House Price Index.
Zoopla Research analysis of UK Finance covering period Jan-May 2024
About Zoopla
Zoopla is a leading UK property website and trusted consumer brand, empowering movers to make better property decisions with over nine million monthly users generating over one billion annual property searches. Zoopla is more than a property portal. It’s free MyHome tool, with over four million homeowner subscribers tracking their property values, provides a pipeline of movers for Zoopla’s customers. The business is investing in leveraging its scale and reach to build new, AI-driven experiences that engage movers and unlock value and a strong ROI for customers.
Zoopla is part of the Houseful group of brands, which includes Alto Software Group and Hometrack.