New insight from Yorkshire Building Society suggests a delayed reaction among first-time buyers may now be emerging, as fresh economic and market uncertainty starts to weigh on their confidence in homeownership following a prolonged period of resilience.
The figures, based on the Society’s analysis of the latest mortgage application data from data and technology consultancy CACI, show first-time buyer (FTB) applications fell by 9.1% in the second quarter (Q2) of 2026 compared with the same period last year.
Between 30 March and 28 June 2026, 119,749 first-time buyers applied for a mortgage, down from 131,682 during the same period in 2025.
The decline follows a period of remarkable resilience among fledgling homeowners. Despite the withdrawal of Stamp Duty incentives in April 2025 and persistent affordability challenges, first-time buyer activity had remained relatively robust, with applications holding broadly steady in the first three months of this year, with a marginal rise of 0.6% compared to Q1 2025.
However, the latest figures suggest market and interest rate volatility linked to tensions involving the US and Iran, may now be prompting some prospective buyers to delay purchasing decisions.
Over the first six months of 2026 (H1), first-time buyer activity fell by 4.3% (from 257,330 applications in H1 2025 to 246,197 in the same period of this year). By contrast, home-mover applications fell by 7.9% in Q2, to 103,197 from 112,100 – but have remained broadly flat over the year so far, with a drop of just 1.1% (from 211,843 transactions to 209,471) since 1 January, perhaps demonstrating their higher levels of confidence.
Max Shepherd, group economist at Yorkshire Building Society, said: "The housing market has weathered several challenges over the past 18 months, including the end of Stamp Duty relief for first-time buyers last year. Despite concerns that this would significantly dampen demand, their buying activity remained surprisingly robust and continued to outperform expectations for much of that period.
"However, as many feared and we anticipated, the economic backdrop has become more uncertain in recent months. Increased geopolitical tensions, financial market volatility and questions around the future path of interest rates appear to be affecting confidence across the market
"The fact that first-time buyers and home-movers have all seen declines suggests this is part of a broader softening in consumer sentiment rather than a fundamental change in the underlying appetite for homeownership.”
Max added that this only sharpens the imperative around helping hardest-hit would-be homeowners: "Affordability continues to be particularly stretched for many aspiring homeowners, meaning additional uncertainty can have a disproportionate impact on those trying to take their first step onto the property ladder. Some prospective buyers may simply be choosing to wait until the outlook becomes clearer.
"While one quarter does not establish a long-term trend, these figures underline the importance of continuing to support first-time buyers wherever possible. They play a vital role in maintaining healthy housing market activity and sustaining home-moving chains across the country.
"We have seen encouraging progress in recent years through improved market stability, greater innovation in mortgage lending and targeted affordability support. It is important that momentum is not allowed to stall because of short-term uncertainty."
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 marked its second anniversary earlier this year, has already helped more than 2,500 first-time buyers purchase a home worth up to £500,000 with a deposit of just £5,000.
