The number of first-time buyers who bought a home with a mortgage fell to its lowest level in a decade in 2023, according to a leading lender.

The figures, from Yorkshire Building Society, are the latest evidence that housing affordability has been stretched to the limit by rising mortgage interest rates and high house prices.

The lender calculated that across the UK there were an estimated 290,000 first-time buyers in 2023. That would be down by a fifth compared with 2022, when the number reached 370,000, and the lowest since 2013, when the total was 260,000.

In 2021 the number of first-time buyers was put at a 20-year high of more than 400,000 as the coronavirus pandemic prompted millions of people to think about changes to their lives and where they wanted to live, with a stamp duty holiday also strengthening sales.

The fall in the number of first-time buyers last year was less severe than the decrease in the overall number of buyers, said the Yorkshire. This meant the estimated proportion of first-time buyers was a slightly bigger share of homebuyers overall last year, at 54%, up from 53% in 2022.

The Yorkshire said that while activity across all borrower types had fallen because of higher interest rates, cost of living pressures and high house prices, first-time buyers remained determined to overcome these challenges to invest in their own bricks and mortar. But it added that borrowers were finding it harder to meet lenders’ affordability requirements.

The new figures come days after fellow building society Nationwide issued data highlighting how stretched housing affordability had become. It said a borrower earning the average UK income and buying a typical first-time buyer home with a 20% deposit would be saddled with a monthly mortgage payment equivalent to 38% of their take-home pay – well above the long-term average of 30%.

At the same time, said Nationwide, deposit requirements remained “prohibitively high” for many. A 20% deposit on a typical first-time buyer home equated to about 105% of the average annual gross income – though this is down from a high of 116% in 2022.

Ben Merritt, the Yorkshire’s director of mortgages, said: “First-time buyers are the lifeblood of the market and are still clearly keen to buy … The wider market relies on them, not least to support purchases higher up the chain.”

However, there is some hope for homebuyers, who endured a rollercoaster year in 2023. Many financial commentators expect several interest rate cuts this year, which should ease the cost of mortgage borrowing.

Just before Christmas, a five-year fixed-rate mortgage deal priced at below 4% went on sale for the first time since May, and brokers believe there will be more cuts over the coming weeks as banks and building societies compete for custom in the run-up to the traditional spring buying season.

The Yorkshire’s calculations are based on lending data from the banking trade body UK Finance up to September 2023, with buyer numbers for October, November and December 2023 estimated in line with previous first-time buyer patterns.

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Number of UK first-time buyers in 2023 was lowest in a decade