Analysis of data from CACI carried out by Yorkshire Building Society revealed a 0.6% annual increase in the number of applications from first-time buyers, totalling 126,448 between 29 December and 30 March, compared to 125,648 last year.
This is compared to a 12% rise seen from Q1 2024 to Q1 2025, when first-time buyer activity was at its highest since the post-Covid-19 peak of 2022.
Further, new homeowners made up more than half of the purchase market, accounting for 54% of purchases, just below the record 56% share in 2025.
Applications from first-time buyers have risen by around 6% in Q1 each year since the stamp duty incentive for new homeowners was first introduced in 2017.
The rest of the mortgage market also held steady in Q1, with a 7% increase in homemover transactions and remortgage activity rising 45%. Yorkshire Building Society attributed this to borrowers trying to secure rates as lenders made rapid changes.
The mutual said the data showed that the sector needed to reinforce support for first-time buyers and make homeownership more accessible.
Yorkshire Building Society was one of the first lenders to adjust loan-to-income (LTI) policy after regulators eased rules, allowing lenders to complete a higher share of mortgages at high-LTI ratios. Last week, the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) proposed making the changes permanent.
Max Shepherd, group economist at Yorkshire Building Society, said: “This year’s comparatively modest increase in first-time buyer applications shows resilience in difficult conditions, but confidence remains fragile.
“We feared the end of stamp duty relief could create further challenges for first‑time buyers, but growth held up surprisingly well through 2025.”
He added: “However, the external market impact now coming through could affect first-time buyer activity going forward – with higher interest rates potentially affecting their affordability and confidence in Q2. If uncertainty continues – and inflation, interest rates and the general cost of living remain under pressure – we could see even more would‑be buyers pause their home purchase decisions.
“That would be a real setback. Before this turbulence, we were finally seeing positive momentum return: improving economic and market stability, easing mortgage rates and greater innovation across the industry to support affordability. Our market thrives on stability and the current volatility is concerning, though it is to be hoped that the conflict can be resolved and we can return back to a more positive trajectory fairly soon.”
