A delayed reaction may now be emerging among first-time buyers, as new economic and market uncertainty begins to impact their confidence in home ownership after a long period of flexibility, a Yorkshire Building Society insight has revealed.
The figures, based on a community analysis of the latest mortgage application data from data and technology consultancy CACI, show that first-time purchase applications fell by 9.1% in the second quarter of 2026 compared to the same period last year.
From March 30 to June 28, 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 ongoing affordability challenges, first-time buyer activity has remained relatively strong, with orders broadly stable in the first three months of this year, with a marginal rise of 0.6% compared to Q1 2025.
However, the association says the latest figures suggest that market and interest rate volatility linked to tensions between the US and Iran may now prompt some potential buyers to delay purchasing decisions.
During the first six months of 2026, first-time buyer activity fell 4.3% from 257,330 orders in the first half of 2025 to 246,197 orders in the same period this year.
By contrast, home moving orders fell 7.9% in the second quarter, to 103,197 from 112,100, but have remained broadly flat year to date, with just a 1.1% decline from 211,843 transactions to 209,471 since January 1.
“The housing market has overcome many challenges over the past 18 months, including the end of stamp duty relief for first-time buyers last year,” says Max Shepherd, economist at Yorkshire Construction Group.
“Despite concerns that this would significantly dampen demand, their buying activity remained surprisingly strong and continued to exceed expectations during most of that period.”
“However, as many feared and as we expected, the economic backdrop has become more uncertain in recent months. Rising geopolitical tensions, financial market volatility and questions about the future path of interest rates appear to be weighing on confidence across the market.”
“The fact that first-time buyers and home movers all saw declines suggests that this is part of a broader decline in consumer sentiment rather than a fundamental change in the underlying appetite for homeownership.”
“Affordability remains under particularly tight pressure for many aspiring homeowners, meaning the added uncertainty could have a disproportionate impact on those trying to take their first step on the property ladder,” Shepherd adds. “Some potential buyers may simply choose to wait until the outlook becomes clearer.”
“Although the quarter does not set a long-term trend, these figures underscore the importance of continuing to support first-time buyers where possible. They play a vital role in keeping a healthy housing market active and maintaining home transfer chains across the country.”
