The fall in the level of FTBs was attributed to the continued rise of house prices coupled with higher interest rates, while buy-to-let landlords snapping up traditional FTB properties and rising immigration were also blamed for the drop.
Louise Cuming, head of mortgages at moneysupermarket.com, said: “It looks like the attrition of FTBs as they either move out of owner occupation or onto second-time purchases is occurring at a much faster rate than new FTBs coming into the market.
“The rate of decline is surprising and the five interest rate rises in the last 14 months means it is now more expensive for the FTBs to get onto the housing ladder. FTBs are the lifeblood of the market and provide essential liquidity, so the fact this segment is getting smaller is worrying for the economy as a whole.”
Younger buyers were much more likely to choose a short-term fix rate than the national average, with 28 per cent of 25-34 year-olds picking either a one or two-year fix, compared to 21 per cent nationally.
Michael Brill, director of Baronworth Investment Services, said: “I think it’s a combination of FTBs seeing the costs involved and realising they can’t afford it, and also people holding off to see if prices come down.”
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