First-time buyers down just 6%: the resilience story
Conventional wisdom about mortgage rate increases holds that first-time buyers feel the impact most acutely.
They are the most mortgage-dependent group in the market, typically borrowing at higher loan-to-value ratios, with no existing equity to offset rising borrowing costs. When rates climbed sharply following a period of global economic disruption in late February and March 2026, the expectation was that first-time buyer activity would fall the hardest.
Rightmove’s April 2026 House Price Index tells a different story. Across all buyer groups, demand fell following the rate shock. First-time buyers recorded the smallest decline of any segment, down just 6%. They are the most resilient part of the market right now and understanding why matters to anyone currently working towards a first purchase.
What is supporting first-time buyer demand
Three factors are converging to offset the impact of higher rates on first-time buyer affordability, and each is worth understanding clearly.
The first is earnings growth. Average annual earnings are up 3.9% compared to the same period in 2025, according to Rightmove’s April HPI data. Average asking prices, by contrast, are down 0.9% year-on-year. That combination means the house price-to-income ratio has continued to improve even as monthly mortgage costs have risen. A buyer earning more and targeting a property that costs slightly less in real terms is in a materially better position than headline rate comparisons suggest.
The second is changes to mortgage lending rules. Last year’s review of the Loan-to-Income cap, alongside updated guidance from the Financial Conduct Authority on stress testing flexibility, means that a typical first-time buyer can now borrow more than they could under the previous framework. Some lenders are now offering income multiples above five in specific circumstances. That increased borrowing capacity has partially absorbed the affordability impact of the rate rise.
The third is the supply picture. There are 13% more homes for sale than at the same point in 2024, and the number of new listings is broadly in line with last year. For first-time buyers who previously struggled to find suitable properties within their budget, more available stock means more realistic options rather than the frustration of a supply-constrained market.
What the 6% figure means in practice
A 6% decline in enquiries is not a market in freefall. It is a market adjusting to changed conditions while retaining the structural motivations that have consistently driven first-time buyer activity. People reach a stage in their lives where they want to own a home, and that transition is not primarily driven by short-term rate movements. It is driven by personal circumstances, life stage, and the practical reality that for many people, paying a mortgage builds equity while paying rent does not.
The buyers still actively enquiring in the current rate environment are those for whom the combination of current rates, improved lending terms, and wage growth has produced a sufficiently workable affordability calculation to proceed. They are informed, prepared, and motivated, in a way that the 6% figure alone does not fully capture.
What this means if you are considering a first purchase
The tailwinds the market currently provides to first-time buyers are real but not permanent. Earnings growth moderates over time. Lending rules can change. The supply improvement will not persist indefinitely. The 6% resilience figure is meaningful precisely because it describes buyers who have assessed the current conditions and decided that now is workable rather than waiting for a more comfortable moment that may not arrive on a predictable schedule.
Talk to our team about your first home today.
This article was originally published by BriefYourMarket and is reproduced here with their permission.
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