Gatehouse Bank has reported that there has been a collapse in the appetite of first-time buyers to chase the market over the past year.

The HPP home finance provider used Land Registry data to analyse the percentage changes in the average price paid by first-time buyers compared with those already on the property ladder across more than 100 major UK towns and cities in each of the last two years.

The study found that the number of areas where first-time buyers were willing to chase the market and pay proportionately more than home movers has fallen 98.8% year-on-year, from 81 areas to just one.

The drop has been blamed on affordability and Brexit uncertainty, which are likely to have played a major role in first-time buyers’ appetite to keep pace with the rest of the market, Gatehouse said. Their decision not to chase the market is also likely to be a factor in the continued slowdown in house price growth across the country, the firm added

House prices are still rising in the vast majority of areas but in the last 12 months there was just one town (0.9% of areas studied) where first-time buyers were paying proportionately more than former owner-occupiers a year on — Doncaster, South Yorkshire.

It represents a 98.8% fall from the 81 places recorded in the 12 months to November 2017, which accounted for 76.4% of areas in the study.

Charles Haresnape (pictured), CEO of Gatehouse Bank, said: “First-time buyers are an interesting group because they are a bellwether for affordability and the wider housing market.

“In the round, they are acutely sensitive to whether they are getting good value because it can have a significant impact on how quickly they are able to lower their finance costs and move up the ladder in the future.

“If first-time buyers are chasing the market to a larger degree than home owners, it is a bullish sign for prices. When they do a volte face like this, people should take notice because first-time buyers are the new blood that keeps a market on its feet higher up the ladder.

“This trend could right itself over the next year, but only if wage growth continues to beat inflation and there is confidence in the economic outlook.”