"2025 has the potential to be transformative for FTBs, but only if we act now to address both the short-term barriers and the long-term challenges."
- Brian Byrnes, Head of Personal Finance at Moneybox
Despite 56,900 individuals buying their first home with the help of a Lifetime ISA (LISA) in 2023-24, the last twelve months have been challenging for those facing soaring rental prices, high mortgage rates, and house price growth. The Building Societies Association (BSA) described 2024 as the toughest conditions for FTBs in the last seventy years.
“2024 has been a year of resilience and determination for FTBs. Despite challenging market conditions, this community has demonstrated a remarkable ability to adapt and make informed, well-planned decisions. Since the pandemic, FTBs have faced one challenge after another, yet their focus on planning has allowed them to navigate this uncertainty with greater confidence,” commented Felicity Hollow, Head of Mortgages at Moneybox.
She said: “Our customer research highlights that even those in the early stages of homebuying are fully invested in achieving their goal, taking advantage of schemes like the LISA to build their deposits. As a result, many FTBs will have their deposit saved and will choose to wait patiently for the right time to enter the market.
“As interest rates stabilised in 2024, we’ve seen a growing number decide to take the plunge. With clear saving goals in mind, they’ve shown that external factors, such as market volatility, are less influential when the foundations of their plans are solid. While fluctuations in swap rates and lender pricing have created noise, FTBs have remained focused on the bigger picture.”
Earlier this year, 76% of FTBs called for more support from the government, but the Autumn Budget fell short of expectations. Additionally, the government’s housebuilding targets have been called into question, with the latest report published by the National Housing Federation & Savills predicting a likely shortfall of up to 95k new homes each year. However, the potential ISA consultation in March 2025 presents an opportunity for the government to reassure FTBs that they’re being listened to.
Since FTBs plan to save, on average, a deposit worth £45k, it’s no surprise that help with savings was one of the most needed areas of support (31%). Furthermore, FTBs want to see an increase in innovative products and lending criteria from the property market. 19% called for a relaxation of mortgage affordability assessments, whilst 23% championed no-deposit mortgages. Notably, 17% wanted to see an increase in the cap on loan-to-income ratios for mortgage lending.
Brian Byrnes, Head of Personal Finance at Moneybox, believes FTBs are “the future wealth creators of our society, and supporting them is about much more than helping people buy homes – it’s about securing the financial health and stability of generations to come.
“With stamp duty relief for FTBs ending in March 2025, we’re already seeing a surge in activity. However, many aspiring FTBs who won’t be in a position to complete before the deadline face increased financial challenges. With the average first-time property price at £227,191 edging close to the £250k stamp duty threshold - and far exceeding it in cities such as London where the average is £443,550 – it’s clear that more must be done to address the affordability gap.
“With the average FTB property price of £227,191 edging close to the £250,000 Stamp Duty threshold—and far exceeding it in areas like London, where the average is £443,550—it’s clear that more must be done to address the affordability gap.
“House prices are forecasted to rise by 4% in 2025 and 23% by 2029, making it critical that we help FTBs save and invest in their future,” he concluded.
