"Rising incomes, more modest rates of house price growth, and lower mortgage rates are all making the market more favourable"
- Stephanie Daley - Alexander Hall
First-time buyers have increased their share of the mortgage market, suggesting a shift in dynamics as more new buyers take advantage of supportive conditions.
Data from mortgage adviser Alexander Hall reveals that first-time buyer applications represented 28.7% of its total mortgage activity in 2024. With overall lending through Alexander Hall surpassing £2.25bn across all client types, the figures point to a significant contribution from those entering the market for the first time.
This marks a rise from 23.3% in 2023 and 22.3% in 2022, continuing a three-year upward trend. While the total number of mortgage applications remained largely stable, first-time buyer applications rose by 23.1% in 2024. This increase appears to be compensating for a drop in applications from home movers and property investors.
Shifting market conditions
The stronger presence of first-time buyers highlights the impact of improved market conditions.
The Bank of England’s base rate, which peaked at 5.25% in July 2024, has since dropped by a full percentage point to 4.25%. Alongside this, rising incomes and subdued house price growth are supporting affordability.
According to recent research, affordability for first-time buyers in 2024 reached its highest level in a decade. The average buyer had an income of £31,717, with the typical property costing £226,744.
The end of 2024 brought added urgency, as many first-time buyers moved quickly to complete purchases ahead of stamp duty changes. Between 31 October 2024 and 31 March 2025, buyers paid no stamp duty on the first £425,000 of properties valued under £625,000. This threshold has now been lowered to £300,000.
Emerging preferences and lender behaviour
Alexander Hall’s figures also show that first-time buyers worked with fewer lenders in 2024—31 in total, down from 35 in 2023. This suggests heightened competition among a smaller group of banks and building societies. A more concentrated, competitive market could lead to continued downward pressure on mortgage rates.
There has also been a noticeable shift in buyer preferences. In 2024, 61% of first-time buyers selected 2-year fixed-rate deals, up from 37.5% in 2022. This choice aligns with expectations that the Bank of England may continue lowering the base rate, potentially leading to cheaper mortgages at the end of the fixed term.
MoneyFacts reports that there are currently around 1,230 2-year fixed mortgage products available to first-time buyers, providing a range of options for those entering the market.
“First-time buyers are becoming more prominent players in the mortgage market, as conditions are improving," comments Stephanie Daley, director of partnerships at mortgage adviser 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.”
