First-time buyers are taking a greater share of the mortgage market, with award-winning adviser Alexander Hall reporting a notable rise in applications from this cohort during 2024.
According to internal data from the mortgage broker, first-time buyer applications made up 28.7% of its mortgage business last year, up from 23.3% in 2023 and 22.3% in 2022. With total lending across all client types exceeding £2.25bn, the increase represents a significant market shift.
The rise in first-time buyer demand occurred despite overall mortgage application volumes remaining stable, suggesting that the uptick is compensating for a drop in activity from home movers and buy-to-let investors.
Several factors are contributing to this trend. The Bank of England base rate has dropped from 5.25% in July 2024 to 4.25%, and incomes have improved, while house price growth has cooled since peaking in 2022. Research indicates that affordability for new buyers is at its best level in a decade, with the average first-time buyer earning £31,717 and the average purchase price sitting at £226,744.
Temporary changes to stamp duty thresholds also played a role. Between 31st October 2024 and 31st March 2025, first-time buyers paid no stamp duty on the first £425,000 of a property, up to a maximum value of £625,000. The threshold has since returned to £300,000, but the incentive drove activity in late 2024.
Alexander Hall’s data shows the average first-time buyer used fewer lenders last year, with 31 lenders engaged compared to 35 in 2023, despite higher application volumes. The firm said this reflects stronger competition among a smaller number of providers, contributing to more competitive rates.
In terms of product choice, 61% of first-time buyers chose a 2-year fixed rate deal in 2024, compared to 37.5% in 2022. This suggests growing confidence that rates will fall further, with borrowers expecting cheaper mortgage options at the end of their fixed term. According to MoneyFacts, there are now over 1,230 2-year fixed rate products available to first-time buyers.
Stephanie Daley, director of partnerships at Alexander Hall, said: “First-time buyers are becoming more prominent players in the mortgage market, as conditions are improving. 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.”
