These are challenging times indeed for the UK housing market, and things are changing fast. Though historically low, first-time buyers are becoming a dominant factor, fueled by anticipated interest rate cuts and better mortgage programs. Emily Williams, director of residential research at Savills, notes that many landlords are exiting the market due to the Renters’ Rights Act, which has led to properties being sold to first-time buyers. The home buying landscape is evolving, and very quickly at that. In 2025, first time buyers represented a staggering 33% of all purchases, with half of those transactions occurring in London.
While the market is gradually adjusting, it remains sluggish, with homes taking over 200 days to sell from listing to exchange. Marcus Dixon, head of residential research at JLL, corroborates this trend, stating that the lengthy selling times reflect the current state of buyer sentiment and market conditions. Economists are assuming at least two more interest rate cuts in 2026, which would likely add to the wave of new buyers.
Specifically, lenders are providing fixed-rate mortgages as low as 3.75% in this high-risk environment. As it stands, Santander tops the table with the most attractive rate at 3.55%. Affordable mortgage options are flooding into the market right now, providing fantastic news for first-time buyers. Monthly mortgage costs as a share of income are at their lowest level since 2022. Williams shines a light on the monumental difference these changes could make. With a 15% or even 10% deposit, buyers have serious options opened up to them, particularly in London and the south-east, he points out.
Beyond liquidity, lending conditions have created an altruistic environment for real estate investment. Property values have surprisingly found consistency through moderate increases. According to Nationwide Building Society, the average UK home is now worth £272,998. That’s a promising 1.8% uptick compared to the same year-over-year period ending in November. Aneisha Beveridge, the head of research at estate agents Hamptons, says that first-time buyers play an absolutely essential role in stabilising the market. As prolific as their participation has been, sales figures have recently morphed into inflated realities.
Despite these positive indicators, challenges remain. Dixon acknowledges that the budget created a lot of uncertainty, which hurt the market in the second half of 2025. So instead, we were just keeping our heads above water. This confusion may have led to tentative buyer actions and flat sales during what is usually an important time of year for the housing market.
With first-time buyers remaining the most significant components, these newcomers are sure to tackle the next evolution in the housing sales landscape. Williams points out that the current conditions may reduce the time needed for potential buyers to save for deposits: “That’s certainly knocking two or three years off the amount of time that you need to save for deposits.”
First-time buyers are a growing force in the UK housing market. This surge could be a key tipping point as the market adjusts to new economic realities and evolving consumer expectations. With lenders offering competitive mortgage rates and expectations of future interest rate cuts, the coming years may bring renewed energy to an otherwise slow market.