"Large deposits and mortgage regulations mean a high household income is needed to buy in southern England, where affordability remains a challenge"
- Richard Donnell - Zoopla
Improved mortgage affordability is helping more first-time buyers get onto the housing ladder, but many are paying higher prices than a year ago, according to new analysis from Zoopla.
The average price of a first-time buyer home has reached £229,000, up 2.4% compared with 2024. This increase outpaces the overall UK housing market, where average prices have risen by 1.3% over the same period.
First-time buyers now make up the largest segment of home buyers, accounting for 39% of all property sales and 49% of new mortgages. Improved borrowing conditions over the past six months have given mortgage-dependent buyers 20% more purchasing power, contributing to a 30% rise in first-time buyer mortgage approvals.
This extra capacity is allowing buyers in more affordable regions to target higher-value homes. However, regional differences remain stark. In the North East, first-time buyers are looking at homes 10.2% more expensive than a year ago, while in London, affordability pressures and higher stamp duty costs have led to buyers seeking homes priced 2.4% lower.
Zoopla’s analysis shows that first-time buyers typically aim for properties 15% below local average prices. This discount widens in high-cost areas, to 21% below average in London and the South East, and 17% in Wales, as buyers adjust expectations to align with income and mortgage eligibility.
Across the UK, first-time buyers remain a critical driver of market activity. Most are seeking three-bedroom houses (45%), while demand for flats continues to decline, now representing 29% of interest.
Price growth for first-time buyer homes is outpacing the broader market in nine of the UK’s 11 regions. Notable increases include:
North East: +10.2% (vs 2.4% for the wider market)
Scotland: +6.4% (vs 2.1%)
Yorkshire & Humber: +6.0% (vs 1.9%)
North West: +5.1% (vs 2.7%)
In contrast, London and parts of southern England continue to face affordability challenges as stamp duty reliefs ended in April.
“First-time buyers have had a 20 per cent boost to affordability over the last six months,” said Richard Donnell, executive director at Zoopla. “This is enabling them to look at buying higher value homes in the more affordable parts of the country, which is supporting faster house price growth across the board.
“In contrast, first-time buyers in London and southern England are looking for cheaper homes than a year ago, despite the extra borrowing capacity. The ending of stamp duty reliefs since April has added to the cost of buying a home for first-time buyers. Large deposits and mortgage regulations mean a high household income is needed to buy in southern England, where affordability remains a challenge, and this is acting as a drag on house price growth across southern England.
“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.”
