First-time buyers have sharply pulled back from the housing market, with new figures revealing a 55% year-on-year drop in offers this quarter, according to exclusive market data from estate agency software provider Alto.
The downturn follows the Government’s decision on 1st April to reduce stamp duty relief for first-time buyers, cutting the threshold from £425,000 to £300,000. The change has left many buyers facing significantly higher upfront costs at a time when affordability is already under strain.
Based on activity across 6,000 UK estate agents, Alto’s figures show that while first-time buyer registrations surged by 70% quarter-on-quarter at the start of 2024, this momentum evaporated after the tax change took effect. Viewings by first-time buyers now account for less than 20% of all appointments.
A poll of 250 agents conducted by Alto paints a bleak picture of current market sentiment. Some 41% have seen a drop in new first-time buyer registrations, while 47% report growing buyer caution and fewer offers being made. Nearly one in five agents say first-time buyer viewings are down, with 20% observing that buyers are now viewing six or more properties before deciding — a sign of heightened uncertainty.
“Home buyers are slashing their budgets, dragging their feet or walking away at the eleventh hour. I haven’t seen this much hesitation in years,” said one agent in the South East.
The market shift is already affecting estate agency pipelines and revenues. Many agents are pivoting focus towards second-steppers and landlords to maintain transaction volumes, but are warning that a long-term imbalance could develop without action.
A majority of agents (56%) now want the Government to intervene. Their proposals include restoring stamp duty relief up to £500,000, expanding access to 5% deposit mortgages for renters, offering higher loan-to-value mortgage options, and introducing tougher tax measures for investors to level the playing field.
“First-time buyers were already under pressure with rising living costs, high interest rates and lenders tightening up,” said a London-based agent. “The stamp duty shake-up was the final straw. It tipped already-stretched buyers over the edge.”
Alto CEO Riccardo Iannucci-Dawson said: “This data should be a wake-up call for policymakers. Agents are already seeing the fallout with first-time buyers vanishing from the market, and deals falling through. If the goal is to build a fairer, more accessible housing market, we urgently need more targeted support for first-time buyers. Agents can’t shoulder this alone — the system needs to meet them halfway.”
