New insight from Yorkshire Building Society suggests first-time buyers continue to show greater resilience than the wider housing market, despite ongoing economic uncertainty and affordability pressures tempering activity across the sector.
As the Government prepares to introduce a new Your First home Help-to-Buy scheme replacement, Yorkshire Building Society has released its latest analysis of mortgage application data from data and technology consultancy CACI. This shows first-time buyer (FTB) applications fell by 3.5% in the third quarter (Q3) of 2026 compared with the same period last year.
Between 29 June and 27 September 2026, 118,881 first-time buyers applied for a mortgage, down from 123,149 during the same period in 2025.
While demand among aspiring homeowners softened, the decline was less pronounced than that seen among home movers. Applications from existing homeowners looking to move fell by 10.2% over the same period, from 108,844 to 97,732.
Meanwhile, remortgaging activity increased significantly, with applications rising by 12.0% year-on-year from 102,424 to 114,717, suggesting many existing borrowers are prioritising securing certainty over their mortgage arrangements in a market where rates are moving very quickly, and switching providers to secure the best deals.
Max Shepherd, group economist at Yorkshire Building Society, said: “It’s important to view these figures in the context of what has been a strong couple of years for first-time buyers. After activity fell to a decade low in 2023, we've seen two years of significant recovery, driven by improving affordability, and lower mortgage rates and innovation across the lending market. The challenge for FTBs today is that mortgage rates have increased considerably since the beginning of H2, with affordability still a challenge, as moves have been driven by the global impacts of the Iran War.
"What we’re seeing now is not a sudden fall away in demand, but a reflection of rising interest rates dampening affordability. The fact that first-time buyer activity has held up considerably better than the home mover market suggests the aspiration to own a home remains very strong.
"This demonstrates that confidence remains sensitive to wider economic conditions and interest rates."
The recent slowdown follows an exceptionally strong period for first-time buyers. After reaching a decade low in 2023, activity rebounded strongly in 2024 and 2025 with transactions reaching 332,100 and 391,200 respectively. Against that backdrop, the latest figures suggest the rapid recovery in first-time buyer activity has begun to moderate as affordability pressures and wider economic uncertainty continue to weigh on household finances.
Max said the latest figures underline the importance of maintaining momentum behind efforts to support aspiring homeowners.
He commented: "These latest figures demonstrate that there is no room for complacency. While first-time buyers remain resilient, activity has cooled from the very strong levels seen over the last two years and affordability continues to be a significant challenge for many households.
"First-time buyers are an important catalyst for the housing market as a whole, supporting transactions further up the ladder and helping to keep chains moving. Continued collaboration between lenders, Government and the wider industry will be essential if we are to ensure more people have the opportunity to achieve their homeownership ambitions."
Yorkshire Building Society remains committed to supporting homeownership. The Society was one of the first lenders to adopt loan-to-income regulatory changes in 2025, enabling it to lend more to eligible borrowers. Its innovative £5k Deposit Mortgage, which allows borrowers to purchase a home worth up to £500,000 with a deposit of just £5,000, has helped thousands of first-time buyers overcome one of the biggest barriers to homeownership and get onto the property ladder.
The Government’s announcement of a new Your First Home scheme demonstrates a recognition of the challenges many people still face.
