Affordability pressures blamed as younger borrowers struggle to get on the property ladder
Millions of potential first-time buyers have missed out on homeownership since the global financial crisis, a new study by the Building Societies Association (BSA) has revealed.
According to the analysis, around 7.2 million individuals or couples were anticipated to purchase their first property between 2006 and 2025. However, only 5 million succeeded, leaving an estimated 2.2 million would-be buyers unable to step onto the property ladder.
The report highlights that aspiring homeowners now face a twofold affordability crisis: the high cost of purchasing a property and the end of historically low mortgage rates. Repayments have grown to roughly 22% of a first-time buyer’s income, a 30% increase compared to the 2020 low of 18%.
Despite a surge of first-time buyer activity during the rush to beat the Stamp Duty deadline, challenges persist. Elevated mortgage rates and a lack of affordable homes are creating serious barriers. Research from mortgage adviser Alexander Hall indicates the average price for a first-time buyer property across Great Britain is £244,519.
Although mortgage rates have recently begun to fall and further reductions in the bank rate are expected this year, affordability remains the primary concern. In the BSA’s April 2025 Property Tracker survey, 65% of first-time buyers cited mortgage repayments as the biggest hurdle, while 62% said raising a deposit was a major challenge.
Most successful first-time buyers are borrowing larger sums relative to their income and using higher loan-to-value (LTV) mortgages to bridge the deposit gap. Growing incomes have partly enabled buyers to manage higher monthly repayments.
The “missing millions” include many individuals who, in the years following the financial crash, were spread across various age groups. However, in more recent times, younger buyers, particularly those under 30, have been most affected.
The BSA notes that any future policies aiming to support first-time buyers must address the needs of both young people and older individuals who were unable to buy earlier in life.
The report also stresses that many potential buyers remain trapped in the private rental market, where rents often consume a greater share of income compared to mortgage repayments. This situation makes it extremely difficult for renters to save for a deposit.
While high LTV mortgages, including 95% LTV loans, are available, their supply has been constrained since the financial crisis. Moreover, they are not a universal solution. Data from last year shows that with a 95% LTV mortgage, only 19% of private renters could afford to buy a £100,000 property.
The BSA attributes the widening gap between house prices and wages as the core reason behind the decline in first-time homeownership. It is calling for a long-term government strategy that focuses not only on immediate needs but also on securing future generations’ access to homeownership.
The organisation urges a shift away from solely demand-side interventions, advocating for increased house building efforts and regulatory reforms. It warns that while government measures are a step in the right direction, they will take time to impact supply, and output may still fall short of targets.
Further, the BSA argues that the regulatory environment has become overly restrictive since the financial crisis. It recommends greater flexibility for lenders, including expanding access to high LTV mortgages and reassessing the cap on high loan-to-income borrowing.
“It’s shocking that 2.2 million first-time buyers who would have reasonably expected to buy their own home have failed to do so since the financial crisis,” commented Paul Broadhead (pictured), head of mortgage and housing policy at the Building Societies Association. “Every day that passes without real action, the number of potential lifetime renters is growing.
“We know that there is no single solution for all first-time buyers, and not all aspiring homeowners will be able to achieve their dream while the double affordability challenge of the high cost of buying and high cost of owning a home remains. However, our report outlines several tangible actions that can be implemented to help fix the broken housing market and to support the next generation of homeowners.”
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