First-time buyers seeking pricier homes pushes up house price inflation

First-time buyers are searching for homes priced £10,000 above last year’s level, even as fewer of them are making enquiries, Zoopla figures show.

In London, the average home targeted by a first-time buyer has crossed £500,000 for the first time, reaching £502,250.

That’s despite average prices across the capital remaining unchanged year on year.

The platform’s latest House Price Index shows first-time buyers across the UK are seeking homes costing an average of £254,750, up 4.3% on a year earlier.

The increase is almost three times the 1.5% rise recorded across the wider market, where the average home is valued at £271,900.

Northern house prices up

Prices in London and the South East are flat or falling, according to the index, while northern markets continue to record higher annual increases.

Richard Donnell, executive director at Zoopla, said: “We are in the peak months for home buyers making offers and agreeing sales.

“Despite fewer buyer enquiries than last year, more sales are being agreed as committed movers press ahead as mortgage rates drift lower.”

He added: “Many households are understandably cautious given the wider uncertainty.”

First-time buyer numbers fall

The number of first-time buyer enquiries has fallen by 6% compared with last year, after higher mortgage rates and economic uncertainty led some would-be purchasers to delay their plans.

Those still looking have not shifted towards smaller properties.

Outside London, 53% of first-time buyer enquiries are for three-bedroom houses, unchanged from last year.

In the capital, flats continue to account for more than half of enquiries.

Regional house prices

Average prices sought by first-time buyers in Scotland are 7.9% higher than a year ago, while the West Midlands has recorded a 7% rise.

The South West has seen the smallest increase, at 1.9%.

Zoopla said changes to mortgage affordability testing last year had enabled first-time buyers to consider a wider range of properties.

First-time purchasers account for more than a third of housing transactions each year.

House sales increase

Across the wider market, sales agreed are running 1% ahead of last year, the first positive annual figure recorded in 2026, despite buyer demand being 10% lower.

New homes listed for sale are also up 3.4% compared with a year earlier.

House price inflation has risen from 1.4% last month to 1.5%, with annual increases of between 2% and 3.6% across northern regions, Scotland and Wales.

London has recorded the strongest rise in sales agreed, up 8% year on year.

However, the number of homes for sale in the capital is 13% higher, while annual house price inflation is flat after six consecutive months of modest falls.

Property sector reaction to Zoopla’s house price index

Nathan Emerson, the CEO of Propertymark, said: “Although overall buyer demand remains below last year’s levels, it is encouraging to see agreed sales edging ahead as committed movers continue to drive activity across the housing market.

“First-time buyers remain a crucial part of the market, and the fact that many are aiming for higher-value homes demonstrates ongoing confidence and determination to get onto the property ladder despite affordability pressures.”

Marc von Grundherr, director of Benham and Reeves, said: “London continues to demonstrate remarkable resilience and while headline house price growth across the capital remains largely flat, the fact that sales agreed are up 8% year-on-year tells a very different story beneath the surface.

“Buyers remain active, but they are also more price conscious and selective than they were during the market highs of recent years.

“At the same time, increased stock levels are giving them greater negotiating power and this is helping to keep price growth subdued despite strong levels of transactional activity.”

Verona Frankish, the CEO of Yopa, said: “While there remains a degree of economic uncertainty, the latest market data shows that the UK property market continues to hold up remarkably well and, importantly, transactional activity is moving in the right direction.

“The fact that sales agreed have edged ahead of last year for the first time in 2026 is an encouraging sign that committed buyers and sellers are continuing to press ahead despite a more cautious wider backdrop.”

Jeremy Leaf, a north London estate agent and a former RICS residential chairman, said: “Zoopla has confirmed what we have been seeing in our offices over the past few months: a drop in buyer demand, but those who are in the market are serious about moving — it really is a case of quality over quantity.

“Those motivated buyers on the lookout for a new home are taking advantage of their negotiating position, particularly given the backdrop of ongoing concerns about the Iran war and knock-on effects on the cost of living and mortgage rates.”

Tomer Aboody, a director of property lender MT Finance, said: “While there is some positive growth for the first time this year on the number of sales agreed, demand is still at a relatively low point as inflation and mortgage rates deter buyers.

“Where we have some positive signs is in the first-time buyer market. Despite a fall in number, they are prepared to push themselves further than they were 12 months ago and pay slightly more in order to get on the ladder.”

Tom Bill, the head of UK residential research at Knight Frank, said: “Higher mortgage rates mean the UK housing market will come under gradual and sustained pressure this year rather produce a cliff-edge moment.

“Buyers sitting on mortgage offers that pre-date the Middle East conflict feel a sense of urgency to act while others have seen their spending power eroded.

“Over time the second group will become larger than the first, particularly as inflationary pressures persist, which will put moderate downwards pressure on prices.”