Relaxed lending rules and cheaper mortgages have driven a surge in prices paid by first-time buyers, with average costs up 7.1% over the past year.
Official Land Registry data for Great Britain shows first-time buyers who purchased homes in March paid nearly £231,000 on average, an increase of £15,350 compared to the same month in 2024.
Between January and March, prices for first-time buyers jumped by £4,772, or 2.1%, while prices for existing homeowners rose just 0.8%. This means first-time buyer prices increased 2.5 times faster than those for movers.
Mortgage lender MPowered’s analysis highlights that this spending surge was most pronounced in northern England. In Yorkshire and the Humber, first-time buyers paid £9,467 more in March than in January.
In North East England, the average price for a first home climbed by £9,151 in two months—a 6.6% rise. Over the past year, prices there have increased by 15.1%, and they are up an extraordinary 40% over five years.
East Anglia saw a £8,148 increase in the average price for first homes, a 2.9% rise well above the £5,777 growth for buyers who already own homes.
In contrast, prices fell across London. While those moving within the capital or owning homes paid £19,048 less on average, first-time buyers saw a smaller decline of £4,742.
Data from the Bank of England shows mortgage lending to first-time buyers hit a record high in the first quarter of 2025. MPowered’s findings suggest that eased stress tests, which allow buyers to borrow more, are now driving the first-time buyer boom, replacing the impact of the stamp duty deadline seen in previous years.
