There may now be a delayed reaction among first-time buyers as new economic and market uncertainty begins to weigh on their confidence in home ownership after a prolonged period of resilience, according to insight from the Yorkshire Building Society.
The figures, based on analysis of the latest mortgage application data from data and technology consultancy CACI, show that applications for first-time buyers fell by 9.1% in the second quarter of 2026 compared to the same period last year.
Between March 30 and June 28, 2026, 119,749 first-time buyers applied for a mortgage, compared to 131,682 in the same period in 2025.
Despite the withdrawal of stamp duty incentives in April 2025 and ongoing affordability challenges, first-time market activity had remained relatively robust, with applications largely stable in the first three months of this year, with a marginal increase of 0.6% compared to the first quarter of 2025.
However, the association says the latest figures suggest that market and interest rate volatility, coupled with tensions between the US and Iran, could now prompt some potential buyers to postpone their purchasing decisions.
In the first six months of 2026, starter activity fell by 4.3%, from 257,330 applications in the first half of 2025 to 246,197 in the same period this year.
In contrast, moving requests fell 7.9% in the second quarter, from 112,100 to 103,197, but have remained largely flat so far this year, down just 1.1% from 211,843 transactions to 209,471 since January 1.
Economist Max Shepherd of the 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 purchasing activity remained surprisingly robust and continued to outperform expectations for much of that period.”
“But as many feared and we expected, the economic backdrop has become more uncertain in recent months. Increased geopolitical tensions, volatility in the financial markets and questions about the future interest rate path appear to be affecting market confidence.”
“The fact that first-time buyers and home movers have all seen a decline suggests this is part of a broader weakening in consumer confidence rather than a fundamental change in underlying demand for homeownership.”
Shepherd added: “For many aspiring homeowners, affordability remains particularly under pressure, meaning additional uncertainty could have a disproportionate impact on those trying to take their first step on the property ladder. Some potential buyers may simply choose to wait until the prospects become clearer.”
“Although a quarter show no long-term trend, these figures underline the importance of continuing to support first-time buyers where possible. They play a crucial role in maintaining healthy housing market activity and maintaining moving chains across the country.”