Survey finds growing pessimism among would-be first-time buyers
A significant proportion of renters in the UK have not managed to purchase a home by the age they expected, according to new research from the Building Societies Association (BSA).
The study found that 43% of renters had anticipated owning a property by now, but have been unable to do so. Among those aged 25 to 44, the typical age range for first-time buyers, this figure rises to 59%.
The BSA’s latest Property Tracker survey highlights ongoing challenges for those aiming to enter the housing market. While 31% of renters aged 25 to 44 believe they will be able to buy a home within five years, a slightly bigger proportion (33%) do not think they will ever achieve homeownership.
The desire to own a home remains strong, with only 8% of renters in the 25 to 44 age group expressing no interest in buying — a decrease from 15% five years ago.
These findings support conclusions from a recent BSA report, The Missing Millions, which estimated that since 2006, 7.2 million people or couples would have been expected to buy their first home. However, only 5 million have done so, leaving 2.2 million potential first-time buyers absent from the market.
The survey identifies affordability as the main obstacle for prospective buyers. Sixty-one percent of respondents cited the difficulty of raising a deposit as the biggest challenge, increasing to 67% for first-time buyers. The cost of mortgage repayments was also a major concern, mentioned by 60% overall and 61% of first-time buyers. Accessing a large enough mortgage was a hurdle for 43% of respondents, rising to 48% among first-time buyers.
Job security has become a growing concern too, with 26% of people now saying it is a barrier to buying a home, up from 19% in June 2023. This shift is likely linked to recent increases in unemployment and a decline in job vacancies.
Confidence in the housing market remains subdued. Only 15% of those surveyed believe it is a good time to buy property, down from 20% at the beginning of the year. In contrast, 36% think now is not a good time to purchase a home. Despite relatively stable house prices, 44% expect prices to rise over the next year, while 12% anticipate a decline.
Among renters aged 18 to 24, 86% aspire to own a home. More than a quarter (28%) think they will achieve this within five years. However, 19% do not believe they will ever be able to buy — a rise from 12% five years ago.
The ongoing affordability barriers and low confidence in the housing market present challenges for mortgage brokers. With fewer first-time buyers able to secure a mortgage, brokers may see a reduction in new business opportunities and increased competition for clients. At the same time, the complexity of lending criteria and the need for tailored advice could increase demand for brokers’ expertise, as prospective buyers seek guidance on navigating deposit requirements, mortgage affordability, and changing market conditions.
“Our studies into first-time buyers show that they face the toughest conditions in over 70 years,” said Paul Broadhead (pictured right), head of mortgage and housing policy at the Building Societies Association. “That comes into sharp focus when you see the statistics of the number of people in rented accommodation who have been unable to achieve their dream of homeownership in line with their life plan.
“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. And the research shows how quickly that number is growing - in 2020 only 12% of 18–24 year olds felt homeownership was out of reach, today that figure has increased to 19%.
“We can’t remove the barriers to homeownership overnight, and there won’t be a solution that enables everyone to get on the property ladder. But there is more that can, and must, be done, including regulatory flexibility and government focus on long-term solutions, such as increasing housing supply, rather than short-term demand-side boosts. Our first-time buyer reports provide several tangible actions that could be implemented to help fix the broken housing market and in turn support today’s aspiring homebuyers as well as next generation. Every day that passes without real action raises the number of potential lifetime renters.”
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