First-time buyers are stretching budgets further to secure homes, with average purchase prices rising by 4.3 per cent over the past year to £254,750, despite a cooling in overall market demand.
The increase means those entering the market for the first time are now targeting properties worth around £10,000 more than a year ago, with price growth among this group running at nearly three times the rate of wider UK house price inflation.
The data suggests that while there are around 6 per cent fewer first-time buyers active in the market compared with the same period last year, those who remain are not significantly downgrading expectations or compromising on property type.
Overall UK house price inflation has edged up to 1.5 per cent, with notable regional divergence. Prices are rising by between 2 and 3.6 per cent across northern regions, while London and the South East are recording flat or slightly negative growth.
The figures point to a housing market that is holding up more firmly than expected in the face of higher borrowing costs and ongoing economic uncertainty, even as demand softens.
Despite weaker buyer demand — down 10 per cent year on year — UK sales agreed are running 1 per cent ahead of last year, marking the first positive reading for 2026. Analysts say this reflects a market increasingly driven by committed movers rather than speculative activity.
The data suggests that while fewer buyers are active, those who are proceeding with purchases are continuing to transact, helping to sustain overall activity levels.
The latest snapshot highlights a growing divergence between regions. Stronger growth in the North contrasts with subdued conditions in southern England, where affordability constraints and higher price baselines continue to weigh on momentum.
Industry observers say the market remains finely balanced, with activity supported by resilient employment levels and stabilising mortgage rates, but still vulnerable to shifts in borrowing costs or consumer confidence.
While the outlook remains uncertain, the data suggests the housing market is proving more durable than many had anticipated, albeit with clear regional splits and increasing pressure on affordability for first-time buyers.
First-time buyers are stretching budgets further to secure homes, with average purchase prices rising by 4.3 per cent over the past year to £254,750, despite a cooling in overall market demand.
The increase means those entering the market for the first time are now targeting properties worth around £10,000 more than a year ago, with price growth among this group running at nearly three times the rate of wider UK house price inflation.
The data suggests that while there are around 6 per cent fewer first-time buyers active in the market compared with the same period last year, those who remain are not significantly downgrading expectations or compromising on property type.
Overall UK house price inflation has edged up to 1.5 per cent, with notable regional divergence. Prices are rising by between 2 and 3.6 per cent across northern regions, while London and the South East are recording flat or slightly negative growth.
The figures point to a housing market that is holding up more firmly than expected in the face of higher borrowing costs and ongoing economic uncertainty, even as demand softens.
Despite weaker buyer demand — down 10 per cent year on year — UK sales agreed are running 1 per cent ahead of last year, marking the first positive reading for 2026. Analysts say this reflects a market increasingly driven by committed movers rather than speculative activity.
The data suggests that while fewer buyers are active, those who are proceeding with purchases are continuing to transact, helping to sustain overall activity levels.
The latest snapshot highlights a growing divergence between regions. Stronger growth in the North contrasts with subdued conditions in southern England, where affordability constraints and higher price baselines continue to weigh on momentum.
Industry observers say the market remains finely balanced, with activity supported by resilient employment levels and stabilising mortgage rates, but still vulnerable to shifts in borrowing costs or consumer confidence.
While the outlook remains uncertain, the data suggests the housing market is proving more durable than many had anticipated, albeit with clear regional splits and increasing pressure on affordability for first-time buyers.
Marc von Grundherr, Director of Benham and Reeves, commented: “London continues to demonstrate remarkable resilience and while headline house price growth across the capital remains largely flat, the fact that sales agreed are up 8% year-on-year tells a very different story beneath the surface.
Buyers remain active, but they are also more price conscious and selective than they were during the market highs of recent years. At the same time, increased stock levels are giving them greater negotiating power and this is helping to keep price growth subdued despite strong levels of transactional activity.
What’s particularly notable is the strength of the first-time buyer market, with average target purchase values now surpassing the £500,000 mark for the first time. This suggests that while some buyers may have stepped back due to higher borrowing costs, those who remain committed are still prepared to stretch for the right property in the right location.”
Verona Frankish, CEO of Yopa, commented: “While there remains a degree of economic uncertainty, the latest market data shows that the UK property market continues to hold up remarkably well and, importantly, transactional activity is moving in the right direction.
The fact that sales agreed have edged ahead of last year for the first time in 2026 is an encouraging sign that committed buyers and sellers are continuing to press ahead despite a more cautious wider backdrop.
We’re also seeing the strongest levels of house price growth continue to come from more affordable northern markets where improved mortgage affordability has had the greatest impact. At the same time, first-time buyers remain highly motivated and are clearly unwilling to compromise when it comes to the type and quality of home they want to buy.
Overall, this remains a market driven by necessity and long-term confidence rather than short-term speculation and that is helping to create a far more stable foundation for sustained market activity.”
Chris Hodgkinson, Managing Director of House Buyer Bureau, commented: “While the market has remained more resilient than many expected, the decline in buyer demand is still a very important warning sign and one that is likely to impact both transaction times and seller expectations over the months ahead.
We’re increasingly seeing a market where committed buyers are still progressing purchases, but where a significant proportion of more hesitant or discretionary movers have stepped back to assess the economic outlook and direction of mortgage rates.
This reduction in buyer activity inevitably creates a more drawn out sales process, particularly for sellers who fail to price realistically from the outset. As a result, many homes are taking longer to sell, reductions are becoming more common and overall market sentiment remains finely balanced.
Whilst sales levels are holding steady for now, the market remains highly sensitive to affordability pressures and confidence levels and so any further economic uncertainty could quickly weigh on activity.”
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