First-time buyers are targeting more expensive homes despite a softer housing market, helping to support UK house price growth and transaction levels, a new study finds.

According to Zoopla’s latest house price index (HPI), the average value of homes sought by first-time buyers has risen by £10,000 over the past year to £254,750, an increase of 4.3%, almost three times the national house price growth rate of 1.5%.

While first-time buyer enquiries are down 6% year-on-year amid higher mortgage rates and economic uncertainty, those still active in the market are maintaining their property aspirations. The trend is particularly evident in London, where the average price of homes targeted by first-time buyers has exceeded £500,000 for the first time, reaching £502,250.

Strong growth in first-time buyer budgets has also been recorded in Scotland and the West Midlands. In Scotland, first-time buyers are seeking homes with average prices 7.9% higher than last year and 7% higher in the West Midlands, while the South West sees the lowest first time buyer-focused increase at 1.9%.

Despite overall buyer demand falling 10% compared with last year, sales agreed are running 1% higher. This is not the first time demand has fallen sharply while sales have held firm; it happened after the 2022 mini-budget and again ahead of the Autumn Budget in 2025, Zoopla said.

Zoopla also said committed buyers and sellers continue to underpin market activity, with the number of homes newly listed for sale up 3.4% year-on-year.

Improved mortgage affordability assessments introduced last year have helped widen access to the market, particularly for first-time buyers, who account for more than a third of all housing transactions. Their willingness to spend more is helping to support price growth across the wider market.

Regional house price growth remains strongest in more affordable areas, with prices rising between 2% and 3.6% across northern England, Scotland and Wales. In contrast, price growth remains subdued in London and the South East. Although sales agreed in London are up 8% year-on-year, a 13% increase in homes available for sale continues to give buyers greater negotiating power, keeping annual house price growth in the capital broadly flat.

“Despite fewer buyer enquiries than last year, more sales are being agreed as committed movers press ahead as mortgage rates drift lower," said Richard Donnell, executive director at Zoopla. "Many households are understandably cautious given the wider uncertainty."

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