The number of people buying their first home is expected to rise sharply this year, according to new analysis from Yorkshire Building Society.

The mutual forecasts 390,324 first-time buyer mortgage transactions in 2025, up 18% on 2024 and close to the post-Covid peak of 2022, when 405,250 purchases were completed.

That earlier surge was fuelled by unprecedented government support, strong demand driven by remote working and historically low interest rates.

The projected increase reflects a gradual improvement in affordability, supported by regulatory changes, product innovation across the mortgage market and falling interest rates.

However, the society has warned that progress risks leaving some households behind.

Official figures will be published in February, but data up to October points to a strong end to the year. The total value of first-time buyer completions is expected to reach £84.9 billion in 2025, up 22% from £69.9 billion in 2024.

Max Shepherd, group economist at Yorkshire Building Society, said: “First-time buyers have shown remarkable resilience despite high living costs, market volatility, the end of Stamp Duty incentives and elevated house prices.

“Tailwinds like real earnings growth, lower mortgage rates, and regulatory changes allowing lenders lend borrowers more times their income are helping more people onto the ladder.

“But we must keep momentum going. We know how important the prospect of owning their own home is to people, yet many still struggle to save a deposit or meet affordability checks. We don’t want to see a growing divide between the ‘haves’ and ‘have-nots’ when it comes to homeownership.”

Yorkshire Building Society said it had been among the first lenders to adopt the most recent regulatory changes to loan-to-income limits, allowing it to lend, on average, 15% more or around £37,000 extra to borrowers.

The Society’s £5,000 Deposit Mortgage, launched in 2024, enables buyers to borrow up to £500,000 with a deposit of just £5,000 and has so far helped 1,800 first-time buyers purchase a home.

The total number of house purchases completed with a mortgage is also expected to have risen by 16% in 2025 to 717,588, from 619,120 the previous year. First-time buyers are forecast to account for 54% of that total.