According to analysis from Reallymoving, those getting onto the property ladder still accounted for more than half the market in 2020 with a 51 per cent share.
However, this was a drop on the 56 per cent segment first-time buyers made up in 2019.
A large share of new homeowners also made use of government help, with 46 per cent using the Help to Buy scheme to purchase their first property.
December was the busiest month for home moves last year as the tax break resulted in a 39 per cent fall in moving costs.
Reallymoving found that last year was one of the cheapest periods to move home for those buying and selling at the same time. Before the stamp duty holiday came into effect, the average cost to move was £10,911. This dropped to £6,669 after the tax relief.
Nine out of 10 homebuyers benefitted from the stamp duty holiday last year, and the proportion of first-time buyers liable to pay the tax bill fell from 25 per cent to five per cent.
Although the overall cost of moving fell, other expenses such as legal fees rose because of the increases in house prices in England and Wales which rose from £292,819 in January to £352,239 in December.
Those buying and selling a home typically paid £1,682 in legal fees following the announcement, including expenses and disbursements which was a 15 per cent increase, while first-time buyers paid £1,100 on average, a rise of 11 per cent.
House prices to fall
Reallymoving expects the house price growth to reverse in the first quarter of this year and based on agreed sales, the firm has predicted prices will drop 1.2 per cent in January and 2.5 per cent in February.
First-time buyers continued to pay the least for their homes at an average of £262,180. On average, home movers sold their properties for £313,149 and purchased a new home for £379,191.
Rob Houghton, CEO of Reallymoving, said: “The property market took us on a rollercoaster in 2020, from shock and despair when thousands of home movers were forced to press pause back in March, to the extraordinary resurgence in demand that began in the early summer and continued right through to the end of the year.
“Never before has the Friday before Christmas been the busiest day for home moves.”
However, Houghton added that the drop in first-time buyers in the market last year was concerning.
He said: “They largely didn’t benefit from the stamp duty holiday and faced huge challenges securing finance as higher loan-to-value mortgages disappeared overnight and several high street lenders banned gifted deposits.
“Yet there are reasons to be optimistic that 2021 could see a reversal in fortunes for first-time Buyers as lenders return to the market, competition for homes is reduced and price inflation readjusts downwards.”