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, insight from Yorkshire Building Society reveals.
The figures, based on the society’s analysis of the latest mortgage application data from data and technology consultancy CACI, show first-time buyer applications fell by 9.1% in the second quarter 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.
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 society says 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, 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.
Yorkshire Building Society group economist Max Shepherd says: “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.”
Shepherd adds: “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.”
