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The proportion of first-time buyers who believe now is a good time to purchase a property has doubled over the past year, according to research for a body representing building societies.
A third (33%) of first-time buyers think now is a good time, compared with 16% in December 2023, the Building Societies Association (BSA) said.
Stamp duty costs are set to become more expensive for some buyers from April, when the “nil rate” band for first-time buyers will shrink from £425,000 to £300,000. Stamp duty applies in England and Northern Ireland.
The BSA’s research indicated that a fifth (22%) of people generally think stamp duty costs are an obstacle to buying a new home, falling to 16% among first-time buyers.
The affordability of monthly mortgage payments and raising a deposit are generally seen as bigger barriers to home-ownership, the survey indicated.
It’s encouraging to see that first-time buyers’ confidence in the housing market has grown significantly in the last 12 months
Paul Broadhead, Building Societies Association
The Bank of England is set to announce its latest base rate decision on Thursday. A cut could mean lower mortgage rates for some home-owners.
Experts have predicted a potential quarter-point reduction to 4.5%.
More than half (54%) of aspiring home-owners believe house prices will continue to rise in 2025, the survey found.
One in 16 (6%) is concerned about maintaining their mortgage payments for the next six months, down from 12% in December 2023.
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 of England base 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. First-time buyers will be hoping the (Bank of England Monetary Policy Committee makes) 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.”
YouGov surveyed more than 2,100 people across Britain in January for the research.
Our analysis suggests this change will particularly benefit people in city-centre locations
Ben Merritt, Yorkshire Building Society
Yorkshire Building Society announced on Wednesday that it has expanded the criteria for its £5,000 deposit mortgage, to allow the loan to be used by people buying flats.
Would-be first-time buyers can access the product either direct from the society or through its intermediary lending arm, Accord Mortgages.
The mortgage allows borrowers to buy a property worth up to £500,000 with a deposit of just £5,000.
The society said it has made changes to the deal, which was launched in March 2024, in response to feedback from brokers and customers.
Director of mortgages Ben Merritt said: “Our analysis suggests this change will particularly benefit people in city-centre locations in areas like London, the South East and parts of Scotland, where property prices tend to be higher and flats are therefore a popular choice.”
The rate on the Yorkshire’s five-year fixed-rate mortgage has also been reduced from 5.74% to 5.69% and is available for non-new build homes.
The society said the mortgage remains subject to rigorous credit scoring and affordability checks. It is available in England, Scotland and Wales but not Northern Ireland.
