Amid rising costs and limited support, buyers stay resilient with savings and strategic planning
First-time buyers in the UK navigated a turbulent property market in 2024, displaying resilience amid high mortgage rates, rising house prices, and soaring rental costs.
Research by Moneybox found that 71% of first-time buyers plan to purchase within the next two years, with 34% targeting 2025.
“2024 has been a year of resilience and determination for first-time buyers,” said Felicity Holloway, head of mortgages at Moneybox. “Despite challenging market conditions, this community has demonstrated a remarkable ability to adapt and are increasingly making informed, well-planned decisions.”
While many first-time buyers made progress, challenges remain. Over half of prospective buyers reported saving less than expected towards their deposits in 2024, and 28% said they had to dip into savings due to unexpected emergencies.
The Building Societies Association described conditions for first-time buyers as the toughest in 70 years. Rising house prices and high interest rates placed significant pressure on many, with average first-time buyer property prices approaching £227,191 — just shy of the £250,000 Stamp Duty threshold, and exceeding it in regions like London, where the average is £443,550.
Government support for first-time buyers remained a focal point in 2024. However, the Autumn Budget fell short of expectations, leaving many in the market frustrated. While the Lifetime ISA provided a boost, with an average government bonus of £3,000 helping buyers offset some costs, many are calling for expanded support.
Moneybox’s research found that 76% of first-time buyers wanted additional government assistance, with many advocating for innovative lending solutions. Key requests included more 95% loan-to-value mortgages (23%), the introduction of no-deposit mortgages (23%), and a relaxation of mortgage affordability assessments (19%).
The housing market is expected to remain challenging in 2025. House prices are forecast to rise by 4%, and by as much as 23% by 2029. Meanwhile, a report from Savills and the National Housing Federation projects a shortfall of up to 95,000 new homes annually, raising concerns about supply constraints.
The government’s Stamp Duty relief for first-time buyers is set to end in March 2025, spurring a surge in activity. Moneybox reported a 14% increase in mortgage appointments in the four weeks following the recent Budget.
Brian Byrnes (pictured), head of personal finance at Moneybox, urged the government to do more.
“First-time buyers are the future wealth creators of our society, and supporting them is about much more than helping people buy homes — it’s about securing the financial health and stability of generations to come,” Byrnes said. “With the Stamp Duty relief ending soon, many aspiring first-time buyers who won’t complete in time face increased financial challenges.”
To address affordability issues, Byrnes suggested measures such as indexing the LISA property price cap and introducing an annual emergency withdrawal allowance for deposit savings. He also called for a working group involving first-time buyers and industry experts to create equitable strategies for the market.
While the path to homeownership remains difficult, Moneybox data shows that many first-time buyers are preparing for the long term, with 21% prioritising wealth-building through investments and another 21% focusing on saving for retirement.
“2025 has the potential to be a transformative year for first-time buyers, but only if we take action now to address both the short-term barriers and the long-term challenges facing this critical group,” Byrnes said.
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
