Affordability pressures and reduced incentives drive UK-wide decline
Interest in new build properties among first-time buyers in the UK has declined, with only 7.72% opting for these homes in 2024 – a drop from 10.03% in 2022 and a 1.52 percentage point decrease from the previous year.
New data analysis by home moving platform Compare My Move has revealed the trend, which comes despite first-time buyers playing an increasingly prominent role in the UK housing market.
The East of England recorded the highest proportion of first-time buyers choosing new builds, at 10.01%. Wales saw the lowest uptake at just 4.27%. The only part of the UK to see growth in new build purchases among first-time buyers was Scotland, where numbers rose by 2.43%.
One of the main drivers behind Scotland’s growth is higher new build supply. Scotland is currently building 3.64 new homes per 1,000 people — compared to 2.75 in England and 1.51 in Wales — equating to 0.89 more new builds per 1,000 residents than England.
In addition to better supply, Scotland also offers more affordable average property prices and access to initiatives such as the New Supply Shared Equity scheme. Under this scheme, the government can fund up to 40% of a property's cost, reducing the size of the deposit and mortgage needed, while the buyer retains full ownership.
According to Compare My Move founder and managing director Dave Sayce (pictured), affordability is a key factor driving the decline in interest in new build properties across the UK. “Being a first-time buyer is getting harder, the average cost of a new build home in England as of October last year was £420,000, rising 18% from the previous year,” he said.
“Now with the reduction of the stamp duty relief for first-time buyers, the tax they will have to pay on an average new-build home will be £6,000. Even with a 5% deposit, first-time buyers will have to pay £27,000 up front on average. That’s without the mortgage, conveyancing, snagging, and removals costs.”
Rising prices and reduced incentives appear to be making newly built homes less attainable for those entering the market, even as their presence in the mortgage landscape grows.
More than two-thirds of property buyers in the past 12 months were first-time buyers, according to recent data released by Mortgage Advice Bureau (MAB). Mortgage adviser Alexander Hall also reported a rise in first-time buyer activity, with internal application figures showing they accounted for 28.7% of all mortgage business in 2024—up from 23.3% in 2023 and 22.3% in 2022.
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