Mortgage searches by first-time buyers rose sharply in January 2025, marking the busiest month for this segment since February 2024, according to new data from Twenty7tec.

However, despite a strong start to the year, activity remains below levels seen in early 2024, reflecting continued affordability challenges in the housing market.

The number of first-time buyer mortgage searches increased by 91.44% compared to December 2024, rising from 152,994 to 292,890. This made January 2025 the sixth-busiest month on record for first-time buyer mortgage searches. However, searches were still down 10.44% year-on-year, falling from 327,046 recorded in January 2024.

MARKET SHARE AT RECORD HIGHS

While overall search volumes have yet to return to last year’s levels, first-time buyers accounted for a growing proportion of mortgage activity. In January, they represented 25% of all European Standardised Information Sheet (ESIS) documents created—the highest market share for first-time buyers since Twenty7tec began tracking the data, well above the long-term average of 19.5%.

First-time buyers were also particularly active in the high loan-to-value (LTV) market, making up 51.40% of all mortgage activity in the 90-100% LTV segment. This is the highest proportion ever recorded for this group in the high-LTV market.

MORTGAGE ACTIVITY OUTLOOK

Nathan Reilly, director at Twenty7tec, said that while first-time buyer activity has rebounded from December, broader market conditions continue to influence borrowing trends.

“The year is off to a great start for first-time buyers, with mortgage searches up 91.44% on the prior month, making January the busiest month since February 2023 and the sixth-busiest month ever for first-time buyer mortgage search activity.

“Despite this, it’s important to note that although the month-on-month reporting is positive, mortgage searches by first-time buyers are still 10.44% down year-on-year compared to January 2023, reflecting ongoing affordability challenges and shifting market conditions. In other words, it’s good, but it has been better.”

In total, 109,551 ESIS documents were created for first-time buyers in January 2025, making it the fourth-highest month on record for document production. Reilly noted that while activity levels remain below last year’s peak, the strong start to 2025 suggests sustained demand from first-time buyers, particularly in the high-LTV segment.