First-time buyers have sharply retreated from the UK housing market, with new figures revealing a 55% year-on-year collapse in offers during the first quarter of 2025 – a direct consequence of the government’s decision to scale back stamp duty relief.
Data released by estate agency software platform Alto, which tracks activity across 6,000 UK estate agents, highlights the dramatic impact of the April 1st changes to stamp duty thresholds.
The tax-free limit for first-time buyers was slashed from £425,000 to £300,000 – a move that has significantly increased upfront costs for many aspiring homeowners.
A national survey of 250 agents commissioned by Alto paints a stark picture of deteriorating buyer confidence.
FALLING BUYER REGISTRATIONS
Four out of 10 (41%) reported a drop in new first-time buyer registrations; just under half (47%) observed buyers becoming more cautious, with fewer offers being made; some 18% recorded a decline in first-time buyer viewings and one in five agents said buyers were viewing six or more properties before offering – signalling rising hesitation and market uncertainty
While two-bedroom homes priced between £201,000 and £300,000 remain the most in-demand among this cohort, affordability challenges are undermining purchasing momentum.
BUDGETS SLASHED
One South East agent noted: “Home buyers are slashing their budgets, dragging their feet – or walking away at the eleventh hour. I haven’t seen this much hesitation in years.”
Following a surge in activity in early 2024 – widely seen as a rush to beat the deadline – momentum has fizzled.
First-time buyers now account for less than 20% of property viewings, as agents increasingly pivot toward second-steppers and landlords to sustain business.
More than half of agents (56%) are calling for urgent intervention, including the restoration of higher stamp duty relief thresholds, low-deposit mortgage schemes, and targeted support for renters and young buyers.
WAKE-UP CALL
Riccardo Iannucci-Dawson, Alto Chief Executive, says that the data should serve as a “wake-up call” for policymakers.
He adds: “Agents are already seeing the fallout with first-time buyers vanishing from the market, and deals falling through.
“Alto’s market dashboards help agents spot shifts like these early – giving them the insight they need to adjust strategy and better serve clients in changing conditions. However, if the goal is to build a fairer, more accessible housing market, we urgently need more targeted support for first-time buyers. Agents can’t shoulder this alone – the system needs to meet them halfway.”
