According to Yorkshire Building Society, this would also bring first-time buyer numbers close to the previous record of 405,250 in 2022, which the mutual noted was supported by government incentives, such as the stamp duty holiday, higher demand due to remote working and historically low rates.
The mutual attributed the rise in first-time buyer borrowing to improving affordability due to regulatory changes, mortgage innovation and lower interest rates.
UK Finance will publish the official lending data for 2025 in February, but Yorkshire Building Society said figures from October pointed to a “strong finish to the year”. The total value of first-time buyer mortgage completions is expected to reach £84.9bn, a 22% increase on the £69.9bn completed in 2024.
The mutual also expects the overall number of mortgaged house purchases to increase 16% to 717,588 in 2025, compared to 619,120 in 2024. It said this would be largely driven by first-time buyers, who make up 54% of lending.
Max Shepherd, group economist at Yorkshire Building Society, said while the picture had improved for first-time buyers, more needed to be done to address the gap between those who could afford to buy and those who are still struggling.
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Shepherd said: “First-time buyers have shown remarkable resilience despite high living costs, market volatility, the end of stamp duty incentives and elevated house prices. Tailwinds like real earnings growth, lower mortgage rates, and regulatory changes allowing lenders to lend borrowers more times their income are helping more people onto the ladder.
“But we must keep the momentum going. We know how important the prospect of owning their own home is to people, yet many still struggle to save a deposit or meet affordability checks. We don’t want to see a growing divide between the ‘haves’ and ‘have-nots’ when it comes to homeownership.”
