First-time buyer slowdown widens the South–North sales...

A two-speed market for first-time buyers

The UK sales market is no longer moving as one. Industry reporting has pointed to a roughly 27% annual fall in first-time-buyer mortgage enquiries, a signal that higher-for-longer borrowing costs and stretched deposits are pushing the most rate-sensitive cohort of buyers to the sidelines. For developers, lenders and agents, the practical question is not whether demand has cooled — it clearly has in parts of the country — but where it has cooled enough to change pricing power, and where buyers who can still transact are gaining leverage.

REalyse transaction and listings data across the twelve English regions, Scotland, Wales and Northern Ireland shows this slowdown is landing unevenly. The sharpest price corrections are concentrated in the higher-value South, while the North, Scotland and Wales are proving comparatively resilient — a pattern that holds even when the analysis is narrowed to the one- and two-bedroom flats and terraced houses that make up the bulk of first-time-buyer stock.

Where affordability is freezing demand

London is the clearest casualty of the first-time-buyer pullback. REalyse data shows average sale prices across the capital down by close to 9.8% over the past 12 months, against an average sold price of roughly £575,000 and a sold price per square foot of around £640 — by far the highest of any UK region. Within the entry-level segment specifically, average prices for one- and two-bed flats and terraced homes in London sit at roughly £431,000, still down around 5.3% year-on-year, underlining that even "starter" stock in the capital remains priced well beyond what first-time buyers can comfortably borrow against at current mortgage rates.

The South East and East of England show a similar, if less extreme, pattern: average sale prices down roughly 4.6% and 4.9% respectively over the past year, with sold values per square foot still among the highest outside London (close to £399 and £371). The South West has also softened, with average prices down around 3.2%. Listings volumes tell a complementary story — the South East alone carries over 190,000 sales listings in the trailing 12 months, the highest of any region in our dataset, which combined with falling prices suggests stock is building faster than buyers can clear it. Average days on market across the Southern regions sits in the high 50s to low 60s, consistent with a market where sellers are having to wait, and increasingly negotiate, to find a willing buyer.

This is the affordability freeze in numbers: high absolute price points, a borrowing cost environment that has pushed first-time buyers out of the market, and a growing backlog of listings competing for a shrinking pool of qualified demand. For lenders and brokers, it implies continued downward pressure on loan-to-value serviceability calculations in the South; for developers with schemes targeting first-time buyers in these regions, it is a signal to revisit pricing assumptions against realistic mortgage affordability rather than historical comparables.

Where buyers still have leverage

The data points to the South as the region where first-time buyers currently hold the most negotiating power — not because prices are cheap in absolute terms, but because the combination of elevated stock levels, falling average prices and longer days on market gives buyers room to push back on asking prices. Within this picture, the entry-level segment is correcting faster than the broader market in London and the South East, which may reflect first-time buyers being squeezed out first while higher-equity movers continue to transact.

Where the North and devolved nations are holding firm

By contrast, Scotland, the North East, North West, Yorkshire and the Humber, and Wales show markedly more stable pricing. Scotland's average sale price has moved by essentially zero over the past year (around -0.2%), while the North East (-2.0%) and North West (-1.3%) have seen only modest declines — a fraction of the correction seen in London. Average sold values per square foot in these regions remain well below the national spread, from around £192 in Yorkshire and the Humber to around £247 in the North West, reflecting a market where entry prices are already closer to what first-time buyers can realistically afford.

The entry-level segment reinforces this resilience, and in several cases reverses the national trend entirely. REalyse data shows average prices for one- and two-bed flats and terraced homes actually rising over the past 12 months in Yorkshire and the Humber (+3.2%), Wales (+2.4%) and Scotland (+0.04%), even as the equivalent segment falls in London, the South East and West Midlands. Average sale prices for this entry-level stock in these regions remain comparatively low — around £106,000 in Yorkshire and the Humber, £148,000 in Wales and Scotland — a price point still within reach of mortgage products calibrated to typical first-time-buyer incomes.

Days on market in Wales is notably tighter too, averaging around 45 days against a high-50s to low-60s norm elsewhere, which combined with rising entry-level prices suggests genuine competitive tension for affordable stock rather than a market being propped up by low turnover. For investors and developers, this is the more structurally supported end of the market: lower absolute price points, firmer or rising values at the entry level, and faster-clearing listings all point to first-time-buyer demand that has not disappeared so much as relocated to where affordability still works.

Reading the divide through yields and planning pipeline

The regional split has implications beyond pure sales pricing. Where first-time-buyer purchase demand is constrained, as in London and the South East, that demand typically does not vanish — it often shifts into the rental sector, which can support rental growth and gross yields even as sale prices soften. REalyse's combined sales and lettings data allows this substitution effect to be tracked directly at postcode and district level, which is a useful check for lenders assessing collateral risk on schemes originally underwritten against first-time-buyer sales absorption.

On the supply side, the planning pipeline matters too. Regions showing firmer entry-level pricing — parts of Wales, Yorkshire and the North West — are also where many build-to-sell developers have historically targeted smaller unit mixes aimed at first-time buyers. Monitoring consented but unbuilt units in these areas against the demand signals above will help developers judge whether current resilience is likely to persist or whether a wave of new entry-level supply could cap price growth before it becomes meaningful.

Outlook

The first-time-buyer slowdown is real, but it is not a uniform national story. London and the South East are absorbing the brunt of the correction through falling prices, rising listings and longer marketing periods — conditions that favour buyers who can still secure finance. The North, Scotland and Wales are demonstrating that where entry prices remain aligned with affordability, first-time-buyer demand is still active, in some cases pushing prices higher. For investors, lenders and developers, the message is less about a slowing market overall and more about recalibrating regional strategy around where affordability — not just headline price growth — is doing the work.