Introduction
The number of UK first-time buyers experienced a significant rise in 2024, growing by nearly 20% compared to the previous year. This increase, reported by Halifax and based on UK Finance data, marked a record share of new home mortgages. The surge is attributed to more favorable borrowing conditions and a decline in interest rates, leading to greater affordability for those stepping onto the property ladder.
The Growing Share of First-Time Buyers
In 2024, approximately 341,068 first-time buyers secured homes with a mortgage—representing a 19% increase from 2023. This group accounted for 54% of all mortgage-financed property purchases, the highest proportion recorded since 2014. Many of these buyers opted to purchase properties with a partner or co-buyer, with nearly two-thirds of mortgage completions involving two or more names.
Impact of Mortgage Rate Adjustments
Experts suggest that the rise in first-time purchases reflects improved mortgage affordability. Following a peak in summer 2023, mortgage rates saw a decline due to falling Bank of England interest rates, leading to reduced monthly repayments. In early 2024, major lenders such as Barclays and Santander introduced mortgage products with rates below 4%—the first time since November 2023 that such rates became available. Further reductions in the BoE benchmark rate are anticipated, which could continue to support first-time buyer demand.
Challenges Amid Market Growth
Despite lower mortgage rates, affordability remains a significant challenge. The typical deposit required for a first-time buyer in 2024 reached £61,090, an increase of approximately £7,500 from the previous year. In London, where housing prices are notably high, the average deposit for first-time buyers climbed to £125,000, reflecting the steep costs of homeownership in the capital.
The average price of a first-time buyer property across the UK rose by 8% year-on-year, reaching £311,034. Additionally, the average age of a first-time buyer in 2024 was recorded at 33 years, the highest in the past two decades.
The Role of Financial Assistance
As housing affordability challenges persist, increasing numbers of first-time buyers are relying on financial support. In the financial year leading to March 2024, 31% of first-time buyers received assistance from family or friends for their deposit, a noticeable rise from 22% in the mid-1990s. A further 9% secured their deposits through inheritance, highlighting the growing reliance on external financial aid.
Long-Term Market Outlook
While the recent growth in first-time buyer numbers is encouraging, industry experts emphasize the need for a sustained increase in housing supply. Toby Leek, president of NAEA Propertymark, acknowledged the positive trend but stressed that long-term affordability improvements would require the construction of more homes across all types and tenures. Without addressing the housing shortage, property prices may continue to rise, posing ongoing challenges for new buyers.
Final Thoughts
The surge in first-time buyer numbers in 2024 is a promising indicator of market recovery, driven by easing mortgage rates and improved affordability. However, affordability challenges persist, with higher deposit requirements and increasing reliance on financial assistance. As interest rates continue to adjust, the long-term stability of the market will depend on a balance between housing supply and affordability measures.
