Improved affordability and lending conditions fuel momentum
The share of first-time buyers in the mortgage market has increased in 2024, according to data from mortgage adviser Alexander Hall.
Internal application figures show that first-time buyers accounted for 28.7% of all mortgage activity at the firm in 2024. That’s up from 23.3% in 2023 and 22.3% in 2022.
Despite total application volumes staying stable, first-time buyer submissions rose by 23.1% last year. The change suggests that new entrants are offsetting lower activity from home movers and buy-to-let investors.
Alexander Hall, which reported total mortgage applications exceeding £2.25 billion this year, said several factors appear to be behind the growth in first-time buyer activity. The Bank of England base rate has dropped by a full percentage point since July 2024, now sitting at 4.25%. Wage growth and slower house price inflation have also improved affordability.
First-time buyer affordability has reached its best level in a decade, with average earnings of £31,717 against a typical property price of £226,744, according to recent research.
Incentives such as the temporary increase in stamp duty thresholds at the end of 2024 also played a role. Between October 31, 2024 and March 31, 2025, first-time buyers could avoid stamp duty on purchases up to £425,000, provided the total price was under £625,000. Since then, the threshold has returned to £300,000.
The analysis also revealed a change in borrower preferences. In 2024, 61% of first-time buyers chose a two-year fixed rate deal, up from 37.5% in 2022. The increase reflects expectations that interest rates may continue to decline, potentially offering cheaper refinancing options in the near future.
Despite an increase in applications, buyers used fewer lenders — 31 in 2024 compared to 35 the previous year. This points to greater competition among a narrower group of banks and building societies, which may be contributing to more competitive rates.
“First-time buyers are becoming more prominent players in the mortgage market, as conditions are improving,” noted Stephanie Daley (pictured), director of partnerships at Alexander Hall. “Rising incomes, more modest rates of house price growth, and lower mortgage rates are all making the market more favourable.
“It’s also fair to say that first-time buyers, in particular, have benefited from a greater range of lender improvements and product innovation in recent years, which has provided them with a greater range of ways to climb the ladder.”
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