While the path to homeownership is not always smooth, many first-time buyers (FTBs) defied the odds in 2024 according to insights from Moneybox, which supports the largest community of first-time buyers in the UK.
The business saw a 59% year-on-year rise in ‘mortgage in principle’ requests and a 50% increase in year-on-year rise in mortgage applications. Research from Moneybox showed almost three-quarters of FTBs (71%) plan to buy within the next two years, with 34% planning to become homeowners in 2025.
The number of Moneybox Lifetime ISA-enabled house purchases also increased by 62% year on year in 2024, and HMRC data reveals that 56,900 people bought their first home with the help of a LISA in 2023/24.
Some hills to climb
Despite many successes, 2024 was a challenging year for many FTBs who faced soaring rental prices and high mortgage rates and house price growth. The Building Societies Association (BSA) summed up this mix of challenges stating that FTBs were facing the toughest conditions in the last seventy years.
Moneybox’s research echoed some of these challenges, with over half of aspiring FTBs saying they had saved less than they had hoped towards their deposit, and 28% said they’d had to dip into their deposit savings due to an unexpected emergency.
Felicity Hollow, Head of Mortgages at Moneybox, comments: “2024 has been a year of resilience and determination for first-time buyers (FTBs). Despite challenging market conditions, this community has demonstrated a remarkable ability to adapt and are increasingly making informed, well-planned decisions. Since the pandemic, FTBs have faced one challenge after another, yet their focus on planning has allowed them to navigate this uncertainty with greater confidence.
“Our customer research highlights that even those in the early stages of their homebuying journey are fully invested in achieving their goal, taking advantage of schemes like the Lifetime ISA (LISA) to build their deposits. As a result, many FTBs will have their deposit saved and will choose to wait patiently for the right time to enter the market. And, as interest rates stabilized in 2024, we’ve seen a growing number decide to take the plunge. In fact, following the recent Budget, Moneybox recorded a 14% increase in mortgage appointments in just four weeks compared to the equivalent period beforehand, highlighting the renewed urgency among FTBs looking to complete before the start of the next tax year.
With clear savings goals in mind, they’ve shown that external factors, such as market volatility, are less influential when the foundations of their plans are solid. While fluctuations in swap rates and lender pricing have created noise, first-time buyers have remained focused on the bigger picture."
The path ahead in 2025
While first-time buyers made significant progress in 2024, the challenges they face remain stark.
And while 76% of FTBs called for more support from the government, the Autumn Budget fell short of the expectations of this community. In addition, the government’s housebuilding targets have since been called into question, with Savills and the National Housing Federation’s report predicting a likely shortfall of new homes of up to 95,000 a year on average. However, a possible ISA consultation in March 2025 presents another opportunity for the government to reassure FTBs that their voices are being heard.
Outside of government support, there is more that can be done to help FTBs now and into 2025. With FTBs planning to save, on average, a deposit for their first home worth £45K, it’s no surprise that help with saving for a deposit was one of the top areas of support that FTBs wanted from the industry (31%).
In addition, FTBs wanted to see an increase in innovative products and lending criteria from the property industry. 23% wanted to see more 95% mortgages. 19% called for a relaxation of mortgage affordability assessments, and 23% championed no-deposit mortgages. A further 17% wanted to see an increase to the cap on loan-to-income ratios for mortgage lending.
Buying a first home is often the first step to creating and building wealth. With rents rising across the board, those who can buy earlier are able to start that journey sooner. Of those recently successful FTBs, a number had already started to focus on new financial goals to build wealth. 21% said they are now prioritising building wealth through investment, and another 21% are focused on saving for retirement.
Brian Byrnes, Head of Personal Finance at Moneybox, concludes:
“First-time buyers are the future wealth creators of our society, and supporting them is about much more than helping people buy homes—it’s about securing the financial health and stability of generations to come.
“With the Stamp Duty relief for first-time buyers ending in March 2025, we’re already seeing a surge in activity, with a 14% increase in mortgage appointments in the four weeks following the recent Budget. However, many aspiring FTBs who won’t be in a position to complete before the deadline face increased financial challenges. With the average FTB property price of £227,191 edging close to the £250,000 Stamp Duty threshold—and far exceeding it in areas like London, where the average is £443,550—it’s clear that more must be done to address the affordability gap.
“House prices are forecasted to rise by 4% in 2025 and 23% by 2029, making it critical that we help FTBs save and invest in their future. Our data shows that products like the Lifetime ISA can be a lifeline for many, with the average government bonus of £3,000 last year helping to offset what many FTBs will now face in Stamp Duty costs, which are set to increase further in April 2025. This underscores the importance of maximising incentivised savings products like the LISA, which offers up to £1,000 in free government bonus annually for anyone between the age of 18- 40, who is saving towards their first home.
“To ensure meaningful change, we’ve been calling on the government to establish a working group that includes industry experts and FTBs themselves so that we can collectively shape equitable strategies for the future. From indexing the LISA property price cap to introducing an Annual Emergency Withdrawal Allowance, we must ensure these solutions reflect the evolving market and provide practical, tangible support.
“2025 has the potential to be a transformative year for first-time buyers, but only if we take action now to address both the short-term barriers and the long-term challenges facing this critical group.”
