Focus on first-time buyers: The hot leads spending more money

 A smaller pool of first-time buyers hold a growing amount of purchasing power in today’s housing market. For agents and builders, they represent a group of driven purchasers who can unlock property chains.

Spending more to secure a starter home

First-time buyer enquiries are running 6% below last year. Those taking their first step on the property ladder, however, are not budget-conscious. 

They are committed to spending approximately £10,000 more on their first purchase now, compared to a year ago. 

That budget increase is more pronounced in the capital. London’s first-time buyers are targeting homes worth £15,000 more than last year, despite the city’s overall house price growth remaining static.

Undeterred by rising values

The nation’s average first-time buyer asking price has risen to £254,750, an annual increase of 4.3%. This is almost triple the headline UK house price inflation rate of 1.5%.

In fact, the value of starter homes is preventing the average house price slipping into negative territory.

First-time buyers spending more across the nation

The value of first-time buyer homes increased in every region but there were clear differences. 

The biggest value increase was in the North East at 7.9%, followed by 7% in the West Midlands and 6.8% in the East Midlands. 

The picture in the South was a little different. While first-time buyer property values increased, price uplift was weaker. It was also set against a backdrop of little to no overall house price inflation.

Homeownership ambitions remain strong. First-time buyers are willing to stretch budgets, even in a volatile market.

This trend is perfectly illustrated in London, where first-time buyers are spending more that £500,000 for the first time. 

No compromise on property type

First-time buyers remain unchanged in the type of property they are looking for, despite having to pay more. 

• 53% of first-time buyers outside London are targeting 3-bedroom houses, identical to last year

• 53% of first-time buyers in London are targeting flats, also unchanged year-on-year

Key takeaways for estate agents & housebuilders

Targeting first-time buyers should be a core activity. They are committed to spending money to become homeowners, even in challenging conditions. 

They're also chain-free buyers. This prevents market stagnation and steers transactions towards completion.

Our data suggests you can be more bullish when it comes to the size and price of properties served to first-time buyers. Avoid the temptation to only show smaller, cheaper homes.

The willingness to spend more money should also prompt a careful reconsideration of how starter homes are priced. Regional differences should be used to set new benchmarks.

Our data suggests the value of starter homes is unlikely to drop, which can be reflected at valuation appointments with homeowners.

Connecting with first-time buyers

Our intelligence is designed to deliver agents quality leads at a time when buyer demand is weakening. Right now, that means presenting you with high intent, first-time buyers. These leads will respond well to well-presented family properties and new home incentives.

You can also increase your chances of converting motivated first-timers into solid buyers by introducing them to mortgage advisers. This is especially important given 2025’s mortgage affordability rule change, which made it easier for property novices to borrow money.