The average price paid by first-time buyers has jumped by 7.1% over the past year, according to the latest housing market data, adding further pressure on those trying to get a foot on the property ladder.
The sharp rise, which translates to an average increase of nearly £16,000, has been attributed to a combination of strong demand, limited housing stock, and increased competition from buyers returning to the market following last year’s dip in mortgage rates.
Despite government incentives aimed at supporting first-time purchasers, including mortgage guarantee schemes and stamp duty relief on lower-value homes, affordability remains a key concern. The average deposit required has also risen, with many buyers now needing to save over £40,000 to secure a typical starter home.
Estate agents and property analysts have noted a significant imbalance between supply and demand, especially in urban areas and commuter towns. According to property platform data, listings suitable for first-time buyers, such as one- and two-bedroom flats or small houses, have fallen by 12% year-on-year.
“First-time buyers are competing not only with each other but also with downsizers and investors, which is driving prices up in this segment,” said Louise Grant, a property market analyst. “We’re seeing homes that would have sat on the market for weeks last year being snapped up within days.”
While the national average shows a 7.1% increase, some regions have seen even steeper rises. The North East and parts of the Midlands recorded year-on-year growth above 9%, while London saw more modest gains of around 3%, largely due to higher starting prices and slightly improved availability of flats post-pandemic.
With the Bank of England holding interest rates steady for now, mortgage costs have stabilised, but the combination of higher home prices and rising living costs is making affordability tighter. Lenders are continuing to stress-test applicants rigorously, often requiring higher salaries or larger deposits than in previous years.
“It’s a real challenge for first-time buyers right now,” said James Parker of Spartan Property Estate Agents. “We’re doing everything we can to guide buyers through the process and help them find realistic options, but the market is moving fast.”
Looking ahead, experts are divided. Some predict that continued high demand and slow building rates will keep prices climbing into 2026. Others believe political pressure and potential interest rate cuts could cool the market and bring relief to aspiring homeowners.
In the meantime, first-time buyers are being encouraged to act decisively, get mortgage agreements in place early, and explore alternative areas or property types to improve their chances.