First-time buyer sales dipped to less than 14 per cent of all transactions during the second quarter of 2004.
This is according to the latest Home Sale Network property survey, which for the same period last year recorded a figure of 18 per cent.
In June sales to first-time buyers had further declined to just over 12 per cent.
"The past two months have seen a marked change in the housing market," said Richard Tucker, managing director of Home Sale Network. "The price increases and shortage of property, which characterised a booming first quarter, have calmed."
He added: "It is interesting to see the impact that publicity surrounding Mervyn King's comments had in June, combined with the effect of interest rate rises and the diversion created by Euro 2004."
The Home Sale Network survey also found that for the second quarter the market appears to be calming.
Almost half of respondents (45 per cent) reported a decline in the number of buyer enquiries, compared to an increase reported by more than 70 per cent during the first quarter.DeHavilland Information Services plc