First-time buyer (FTB) mortgage applications have fallen by 9.1% year-on-year in Q2 as fresh economic and mortgage uncertainty has begun to weigh on homeownership confidence, Yorkshire Building Society has found.

The society’s latest analysis of CACI data revealed that between 30 March and 28 June, FTB applications totalled 119,749, down from 131,682 in the same period in 2025.

The decline follows a period of "remarkable resilience" among new homeowners.

Despite the withdrawal of stamp duty incentives and persistent affordability challenges, Yorkshire Building Society said FTB activity had remained "relatively robust", with applications holding broadly steady in the first three months of 2026, increasing by 0.6% compared to Q1 2025.

However, market and interest rate volatility linked to tensions in the Middle East may now be prompting some prospective buyers to delay purchasing decisions.

In the first six months of 2026, FTB activity dropped by 4.3%, while home mover applications remained broadly flat, falling by 1.1%. The Yorkshire said that perhaps demonstrates higher levels of confidence from home movers.

Group economist at Yorkshire Building Society, Max Shepherd, said the housing market has "weathered several challenges" over the past 18 months.

He added: "However, as many feared and we anticipated, the economic backdrop has become more uncertain in recent months. Increased geopolitical tensions, financial market volatility and questions around the future path of interest rates appear to be affecting confidence across the market

"The fact that FTBs and home-movers have all seen declines suggests this is part of a broader softening in consumer sentiment rather than a fundamental change in the underlying appetite for homeownership."

Shepherd stated that affordability continues to be particularly stretched for many aspiring homeowners, adding further uncertainty for those who are trying to make their first step onto the property ladder.

He concluded: "While one quarter does not establish a long-term trend, these figures underline the importance of continuing to support FTBs wherever possible. They play a vital role in maintaining healthy housing market activity and sustaining home-moving chains across the country.

"We have seen encouraging progress in recent years through improved market stability, greater innovation in mortgage lending and targeted affordability support. It is important that momentum is not allowed to stall because of short-term uncertainty."

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