First-time buyer mortgage sales at their lowest level since 2013, according to ONS analysis of data from the FCA, which have been published at local authority level for the first time.
The FCA data shows that the overall number of new first-time buyer mortgages in the UK has been falling since the peak in 2021, and in 2023 was the lowest since 2013, at 282,000. However, sales of first-time buyer mortgages made up a greater proportion of total residential property sales in 2023 (38.4%) than they did 10 years before (28.0%).
The number of UK first-time buyer mortgages sold was relatively high in 2006, at around 377,000, but by the time of the 2008 global financial crisis two years later, that number had fallen by nearly half to 186,000.
First-time buyer mortgage sales stayed low for the next five years, before they began to increase in 2013.
The number steadily increased through the 2010s but fell from 339,000 in 2019 to 297,000 in 2020, the year when lockdown restrictions during the coronavirus pandemic affected the housing market.
The number of first-time buyers increased the following year, and 2021 saw the highest number of new mortgages in the time series, 394,000. This may have been influenced by the stamp duty holiday, which was in effect from June 2020 to July 2021.
Since 2021, numbers of first-time buyer mortgages have been steadily declining, and this trend has continued in 2023, with numbers dipping to the lowest levels (282,000) since 2013.
However, when looking at the number of first-time buyer mortgages as a proportion of all residential property sales, there has been a steady increase since 2006.
Less than a quarter of all residential property sales in the years from 2006 to 2008 were for first-time buyer mortgages, rising to around a third (33.8%) in 2018.
By 2023, 38.4% of residential property sales were first-time buyer mortgages. This is because the overall number of residential property sales fell faster between 2021 and 2023 (-39.8%) than first-time buyer mortgages (-28.6%).
First-time buyer mortgage sales fall across London
Several London boroughs saw some of the largest falls in the rate of first-time buyer mortgage sales in the UK between 2013 and 2023.
Similar trends can be seen in other major cities across the UK, with rates of first-time buyer mortgage sales falling or growing more slowly than surrounding areas.
Overall, the South East saw a higher share of new first-time buyer mortgages than London in 2023, with the largest growth in the North East of England and Northern Ireland.
In 2023, 12.7% of first-time buyer mortgages were sold for homes located in the capital – down from 16.8% a decade earlier.
The South East of England had the highest proportion of first-time buyer mortgages in the UK in 2023 at 13.8%.
Of the 10 areas with the highest rates of first-time buyer mortgages per 1,000 dwellings in 2023, one was in London, compared with six in 2013.
Between 2013 and 2021, when first-time buyer mortgage sales peaked, only 10 local authorities saw falls in the rate of first-time buyer mortgage sales, eight of which were London boroughs.
Many local authorities outside of London have seen a marked increase in sales of first-time buyer mortgages since 2013.
In 2023, the three areas with the highest rates of first-time buyer mortgages in the UK were Dartford in the South East (20.2 sales per 1,000 dwellings), Harlow in the East of England, (16.3 per 1,000) and Nuneaton and Bedworth in the West Midlands (15.5 per 1,000).
These areas also saw some of the fastest growth in rates of first-time buyer mortgages in the decade to 2023, of 68.6% for Harlow, 56.1% for Nuneaton and Bedworth, and 34.7% for Dartford.
In comparison, the three areas with the highest rates of first-time buyer mortgage sales in 2013 were all in London; Lambeth (17.9 per 1,000 dwellings), Tower Hamlets (17.7 per 1,000) and Wandsworth (17.7 per 1,000).
Both Lambeth and Tower Hamlets also saw some of the largest falls in rates of first-time buyer mortgages between 2013 and 2023, of 34.2% and 40.5%, respectively.
In Scotland, Wales and Northern Ireland, areas with the fastest growth in first-time buyer mortgages were often outside major cities.
In the devolved administrations, the rate of first-time buyer mortgages is growing fastest in areas surrounding the metropolitan centres.
The areas with the highest growth in the rate of first-time buyer mortgages in Scotland, (more than 35.0%) were South Lanarkshire, North and South Ayrshire, West Dunbartonshire and Renfrewshire.
Metropolitan areas like Dundee City, Glasgow City and the City of Edinburgh saw slower growth, of 8.0%, 24.7% and 10.9% respectively.
While Aberdeen City had the highest rate of first-time buyer mortgages in Scotland in 2013 (15.6 per 1,000), since then it fell to 10.8 per 1,000 in 2023. By 2023 the City of Edinburgh had the highest rate of first-time buyer mortgages, at 13.1 per 1,000 dwellings.
In Wales, most areas saw growth in first-time buyer mortgage sales, with the highest in Newport and Torfaen, where rates grew more than 40.0% since 2013 to 12.8 per 1,000 and 10.7 per 1,000, respectively, in 2023.
While Cardiff had the highest rate of first-time buyer mortgages in 2013 (9.7 per 1,000 dwellings), it grew more slowly over the following decade (8.6%) to 10.6 per 1,000.
Belfast showed the strongest growth rates of the devolved capitals between 2013 and 2023 of 27.9% (to 10.3 per 1,000 dwellings), but Antrim and Newtownabbey saw higher growth in Northern Ireland of 37.7% to 13.7 per 1,000 dwellings in 2023.
Fewer first-time buyers in England’s most urban areas
While the rate of first-time buyer mortgage sales has been falling in London, they have risen in more rural areas.
On average, rural areas in England and Wales saw rates of first-time buyer mortgages rise by 9.7% between 2013 and 2023, while urban areas saw a 3.7% rise on average.
In 2013, all 20 areas with the highest rates of first-time buyer mortgages were urban, with the majority of the population near to a major town or city, according to the 2021 urban rural classification.
However, as numbers of first-time buyer mortgage sales grew between 2013 and 2021, rural areas saw some of the highest growth rates (63.3% on average compared with an average of 48.8% across urban areas).
The rate of first-time buyer mortgages in West Oxfordshire grew from 7.2 per 1,000 in 2013 to 16.6 per 1,000 in 2021, an increase of 131.8%, the highest of any local authority in this period.
By 2021, three of the 20 areas in England and Wales with the highest rates of first-time buyer mortgages were ‘intermediate rural’, with the majority nearer to a major town or city: Central Bedfordshire (22.3 per 1,000 dwellings), South Derbyshire (21.2 per 1,000) and Bolsover (19.3 per 1,000).
Between 2021 and 2023, as first-time buyer mortgages sales began to fall, rates fell faster in rural areas (-32.3%) compared with urban areas (-30.1%).
Those urban areas which saw the strongest growth in first-time buyer mortgage sales in the full decade between 2013 and 2023 were outside London, in Harlow in the East of England (68.6%), Knowsley in the North West (63.3%) and Nuneaton and Bedworth in the West Midlands (56.1%).
