Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.

First-Time Buyers Raise Budgets by £10,000 Despite Falling Numbers

First-time buyer numbers have dropped by 6%, but those still in the market are now targeting homes priced £10,000 higher than a year ago, according to Zoopla’s latest house price index. The average price sought by first-time buyers has increased by 4.3% to £254,750.

Zoopla’s data shows that this rise in first-time buyer budgets is nearly three times the nationwide rate of house price growth, which stands at 1.5%. The average UK house price is now £271,900. Regional differences are notable, with house prices in Northern regions rising by 2-3.6%, while prices in London and the South East are flat or negative.

Market Activity and Regional Trends

Despite a 10% drop in buyer demand, UK sales agreed are running 1% ahead of last year, marking the first positive sales agreed figure of 2026. Zoopla attributes this to a shift in market composition, with committed buyers continuing to make offers while those sensitive to higher borrowing costs have stepped back.

In London, sales agreed are up 8% on last year, the strongest growth of any region. However, with 13% more homes for sale, buyers in the capital retain negotiating power, and price inflation remains subdued. London house prices have stabilised after six months of modest falls, with inflation now flat year-on-year.

First-Time Buyer Focus

The average first-time buyer house price in London is now £502,250, £15,000 higher than last year, marking the first time this figure has exceeded £500,000. In Scotland, first-time buyers are seeking homes with average prices 7.9% higher than last year, while the West Midlands has seen a 7% increase. The South West records the lowest increase at 1.9%.

Zoopla’s figures show that outside London, 53% of first-time buyer enquiries are for three-bed houses, unchanged from last year. In London, over half of first-time buyer enquiries remain focused on flats. Changes to mortgage affordability testing last year have made more homes accessible to first-time buyers, supporting both sales and house price growth.

First-time buyers account for over a third of all sales each year, and their willingness to spend more is creating upward pressure on entry-level prices across the market.