A third (33%) of first-time buyers (FTBs) believe it is a good time to purchase property, almost double the number from December 2023, research by the Building Societies Association (BSA) found.
Around one in five (22%) viewed Stamp Duty as a major obstacle, despite upcoming tax changes.
More than half (54%) of aspiring homeowners believed house prices would rise in the next year.
After two cuts to the Bank Rate in 2024 and more expected, these buyers felt more positive than they did a year ago.
They were also more upbeat about the housing market compared to other UK adults.
About two-thirds saw mortgage payments and raising a deposit as barriers, although these were less of a concern than they were for last year’s first-time buyers.
Concerns about mortgage payments in the next six months were the lowest since June 2022, with only 6% worried and just 1% lacking confidence in their ability to keep up repayments.
Paul Broadhead, head of mortgage and housing policy at the BSA, said: “It’s encouraging to see that first-time buyers’ confidence in the housing market has grown significantly in the last 12 months.
“Although there were fewer Bank Rate cuts last year than had been expected, the two reductions did mark a significant turning point in what has been a difficult three years.
“However, we know only too well that confidence in the housing market can be fragile and change quickly.
Broadhead added: “First-time buyers will be hoping the MPC make another cut to the Bank Rate today, to further ease their affordability pressures.
“But with political developments around the world and in the UK causing uncertainty in the financial markets, the Bank Rate cuts this year may again be fewer and potentially later than current forecasts.
“Despite their optimism, we know that first-time buyers face an unprecedented affordability issue and the BSA has repeated called for a long-term strategy that will increase the number of first-time buyers.
He said: “The Financial Conduct Authority’s mortgage lending review, which we hope will consider the relative costs and benefits of stricter regulation versus the social benefits of homeownership, should help deliver greater mortgage innovation to meet the needs of prospective homebuyers.
“For example, allowing part repayment, part interest only lending, and the flexibility to shift between them, could improve affordability for many and be the difference between be able to get on the property ladder or not.
He added: “Building societies have a proven track record of lending responsibly and supporting first-time buyers and want to do more.
“We are therefore very keen to work with the FCA to achieve this.”
