The number of first-time buyer offers fell by 55% in the first quarter of 2025, as the government’s move to scale back stamp duty relief sends shockwaves through the UK housing market.

The figures, published by estate agency software provider Alto, reflect activity across more than 6,000 agents and coincide with the April 1 cut to the stamp duty threshold for first-time buyers. The tax-free limit dropped from £425,000 to £300,000, pushing up upfront costs and significantly denting affordability for those looking to get on the property ladder.

A national survey of 250 estate agents commissioned by Alto underscores the extent of the retreat. Forty-one percent reported a fall in first-time buyer registrations, while 47% said purchasers had become more cautious, with offers down and viewing activity softening. Eighteen percent reported a fall in first-time buyer viewings, and one in five agents noted that potential purchasers were viewing at least six properties before considering a bid – a clear signal of growing uncertainty.

Despite continuing demand for two-bedroom homes priced between £201,000 and £300,000, agents say that affordability pressures are stalling transactions and dragging out decision-making. One South East agent remarked: “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.”

The sharp decline follows a rush of activity in early 2024 as buyers sought to complete before the revised stamp duty rules came into effect. That momentum has now evaporated. According to Alto’s data, first-time buyers currently represent less than 20% of all property viewings, with agents increasingly focusing on second-steppers and landlords to drive business.

CALL FOR INTERVENTION

More than half of agents (56%) are now calling for urgent government intervention to restore market confidence. Suggested measures include the reinstatement of higher stamp duty relief thresholds, new low-deposit mortgage schemes, and broader support for renters and younger buyers struggling to save for deposits.

Riccardo Iannucci-Dawson, chief executive at Alto, described the figures as a “wake-up call” for policymakers.

“Agents are already seeing the fallout with first-time buyers vanishing from the market, and deals falling through,” he said. “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.”

The report suggests that without swift policy correction, the UK risks a prolonged first-time buyer drought that could undermine broader housing market stability in the months ahead.