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Yorkshire Building Society said around 290,000 first-time property owners entered the mortgage market in 2023 - a decline of more than a fifth on 2022's total of 370,287.
It comes after the housing market was hit by high mortgage rates and house prices last year, along with the ongoing impact of cost of living pressures on consumers.
The building society said 2023's total was the lowest since 2013, when 260,000 first-time buyers entered the mortgage market.
But its director of mortgages Ben Merritt said there was still a strong appetite to get on the property ladder, despite the challenges many were having in meeting affordability requirements.
He 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."
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Analysts expect conditions for buyers to improve this year.
Mortgage rates have eased in recent months amid falling inflation and expectations that the Bank of England will start cutting interest rates in 2024.
Some lenders also expect house prices to remain static or fall this year.
Yorkshire Building Society group economist Max Shepherd said: "Current market expectations suggest several rate cuts in 2024, which would ease mortgage rates in the first half of the year."
The number of first-time buyers hit a 20-year high in 2021, with more than 400,000 people entering the market following a cut in stamp duty and a rise in demand for extra space as more people worked from home during the COVID pandemic.
However borrowing costs, including mortgages, started to rise after the Bank of England began increasing interest rates in December 2021 in an attempt to bring down inflation.
Yorkshire Building Society, the UK's third largest, also said the overall number of property buyers decreased at an even more severe rate last year, meaning the proportion of first-time buyers rose to 54% of the total - up from 53% in 2022.