The Intermediary – October 2025 - Flipbook - Page 25
RESIDENTIAL
Opinion
The first-time buyer
crisis is deepening
A
nyone trying to buy
their first home
in 2025 might be
forgiven for feeling
like the odds are
stacked against them.
Our data shows that while the prices
being paid by first-time buyers (FTBs)
are edging down and mortgage rates
have soened a lile, for many wouldbe homeowners, the numbers still
don’t stack up.
At reallymoving, which provides
quotes for around 10% of the UK’s
home movers, our analysis of
conveyancing quote data shows that
FTBs have steadily retreated from
the market this year. Their share of
moves in England and Wales fell 6.6%
between January and August – a 10.4%
drop in less than a year.
‘Cheaper’ is not affordable
In January, almost two thirds (63.3%)
of all home movers were buying for
the first time, but by August, that
figure had slipped to 56.7%. The
average price they paid for their first
home dipped by 3.1% to £271,784 over
the same period, but that clearly
wasn’t enough to tempt buyers
back in.
Falling prices may sound like good
news for those trying to get on the
ladder, but the reality is that many
remain priced out. Mortgage rates
may have soened, but with most
deals still hovering around 4.5 % to
5%, affordability tests and monthly
repayments remain challenging,
particularly with inflation and
everyday costs eating into savings.
Saving in a crisis
The biggest hurdle facing first-time
buyers is still the deposit itself –
especially for those buying without
parental support. Rents are easing but
remain high, and essentials like food,
transport and energy are still eating up
a hey chunk of monthly income. We
carried out analysis last year looking at
how long it takes to save to buy a first
home, including raising a 10% deposit
and covering moving costs. We found
that for a single person puing aside
10% of their earnings each month, it
would take 76 months (6.5 years) to get
on the housing ladder. Those pooling
resources with a partner, friend or
sibling could see that time halved
to 38 months (just over three years)
assuming they’re both earning the
national average wage.
And then there’s Stamp Duty. The
Government’s decision earlier this
year to reduce the FTB threshold from
£425,000 to £300,000 means FTBs
in more expensive areas, namely
London, the South East, South West
and East, have lost valuable tax relief.
Increasing numbers are now skipping
the typical first flat altogether and
saving longer to buy a house instead,
reducing transactions overall.
A nationwide decline
Every region of England and Wales
has seen a drop in FTB activity this
year. The steepest falls were in the
South West, Yorkshire & Humber,
the East of England and the North
East – all down by more than nine
percentage points. The North East saw
a 9% increase in average prices paid by
FTBs between January and August and
also one of the sharpest share falls –
reinforcing the impact of affordability
pressures.
In London, the story is slightly
different. Despite having the highest
property prices in the country,
remarkably, London has the largest
share of FTBs, accounting for 68% of
all movers. High rental costs making
renting unsustainable long term, and
strong support from the ‘Bank of Mum
and Dad’ are both likely factors.
The typical is changing
It’s not just who’s buying that’s
shiing, it’s what they’re buying too.
Our data shows that the traditional
image of the first-time buyer snapping
ROB HOUGHTON
is founder and CEO
at reallymoving
FTBs have steadily
retreated from the market
this year. Their share of
moves fell 6.6%”
up a new build flat is changing. The
proportion of FTBs buying flats has
dropped from 29.7% in January to
26.5% in August, a 10.5% decline, amid
ongoing worries about cladding issues
and mortgageability, ground rents and
rising service charges.
Meanwhile, the share of new
build purchases has fallen by almost
a quarter to its lowest level since
2016. Supply is part of the problem –
Government data shows new home
completions fell 19% year on year
in Q2 2025 – but new build price
premiums and lending restrictions are
likely to be also playing a part.
What’s next?
For many would-be buyers, the market
feels stuck in a frustrating stalemate.
Prices are down a lile but not
enough, borrowing is cheaper but still
expensive, and government support
remains thin on the ground.
Unless we start to see a dramatic
increase in housebuilding, as has
been repeatedly promised, along
with targeted measures to boost
affordability, first-time buyers are
unlikely to regain their market share
any time soon. Beyond restricting
market mobility, this will undermine
the financial security of young people
and erode the long-term stability that
home ownership can provide. ●
October 2025 | The Intermediary
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