First-time buyer activity increased slightly in the final quarter of the year, supported by more stable interest rates and the base rate cut in December, according to new research.

The analysis carried out by Yopa measures first-time buyer (FTB) demand by calculating the proportion of homes listed under buying schemes that were sold subject to contract, compared with total available stock, and tracking changes from the previous quarter.

Across Britain, 32.8% of first-time buyer–suitable homes had sold subject to contract in Q4, up from 32.3% in Q3, an increase of 0.5 percentage points. Despite the rise in demand, first-time buyer homes made up just 1.9% of all properties listed for sale during the quarter.

Newcastle recorded the highest level of demand, with 57.6% of first-time buyer homes sold subject to contract in Q4. Bristol followed at 52.4%, with Liverpool third at 47.4%, indicating continued competition in these markets.

In terms of quarter-on-quarter change, Plymouth saw the largest increase in demand, rising 14.1 percentage points to 34.6%. Newcastle recorded a 13.4 percentage point increase, while Cardiff rose by 12.2 percentage points.

Supply levels remain low across all areas. Plymouth had the highest proportion of first-time buyer–suitable homes, but these accounted for only 2.3% of total stock in Q4. Portsmouth and London followed at 1.6%, highlighting limited availability nationwide.

Verona Frankish, chief executive officer at Yopa, commented: “After a challenging year for first-time buyers, it’s encouraging to see demand begin to edge higher as interest rates stabilise and confidence slowly returns, particularly following the base rate cut seen in December.

“However, while demand has improved, the underlying challenge for first-time buyers remains unchanged. The supply of homes available with the support of a buying scheme is still extremely limited and this imbalance continues to cap the pace of recovery.

“Until we see a meaningful increase in the availability of genuinely affordable first-time buyer homes, improvements in demand are likely to remain modest, even with a more settled outlook for the year ahead.”