Research by homeownership group Wayhome, which used Halifax figures, found that in 2020, the first year of the pandemic, first-time buyers contracted by around 13.5% year on year to 303,980.

This was the largest annual decline in the last decade and the third annual decrease between 2012 and 2020.

In 2021, first-time buyers rose by around a third to 405,230. This was partially due to the stamp duty holiday introduced in July 2020 acting as a catalyst for the market.

Wayhome said that this was the highest annual increase in a decade, and the first-time numbers for this cohort had exceeded 400,000 in that time period.

The firm continued that the decline in 2022 was the second highest over the past 10 years.

However, Wayhome also said that whilst first-time buyer numbers had fallen from the high of 2021, the number of first-time buyers was above pre-pandemic levels and second highest for a decade.

Regional falls

The largest decreases in first-time buyers was in Wales and South East at 12.5%, followed by Northern Ireland at 12.2% and South West at 12.1%.

The lowest falls were in East Midlands at 6.8%, then the East of England at 8.2% and North West at 9.4%.

‘Very little help for first-time buyers’

Wayhome’s co-founder and CEO Nigel Purves said: “Despite the fact that the pandemic market boom pushed house prices to record highs, we saw a huge boost to the number of first-time buyers making it onto the property ladder and this was largely driven by extremely low mortgage rates, as well as the additional carrot of a stamp duty saving.

“However, this number has declined considerably over the last year and there’s no doubt that growing market uncertainty and a consistent string of interest rate hikes has contributed to this.”

He added that the “good news” was that more first-time buyers were making it onto the ladder when compared to pre-pandemic numbers, but there were worries that the downward trend could “become more prominent going forward”.

Purves said: “The cost of borrowing remains substantially more expensive despite mortgage rates starting to level out and we’re yet to see any real reduction in the already sky-high cost of a home.

“[With the end of Help to Buy] Gradual and shared homeownership models are really the only remaining step up, but we simply can’t fill the void alone, and so the onus is now on the government to step up and address the issue for those who simply can’t make the jump between the rental and housing markets.”