New research from the Building Societies Association has found that a huge proportion of would-be first-time buyers have been frustrated in their bid to get on the ladder.
Overall, 43% of renters say they expected to own a home by this point in their life but haven’t managed to do so. For those aged 25-44, the typical age for buying a first home, this increases to 59%.
Whilst some renters remain optimistic, with around a third of 25 to 44 year olds thinking they will be able to buy a home within the next five years, a similar number want to buy their own home but don’t think they will ever be able to achieve this.
The majority of 25-44 year olds want to be homeowners, and the proportion is growing. Five years ago, 15% of renters said they didn’t want to buy their own home. Today this figure has halved to just 8% who have no aspiration to buy their own home.
Analysis of historic first-time buyer data shows that around 7.2m individuals or couples would have been expected to buy their first home since 2006. However, only 5m have achieved homeownership in this time, suggesting there are 2.2m ‘missing’ first-time buyers from the property market.
Raising the necessary deposit is the biggest barrier for those wanting to buy a home, selected by 61% of respondents. This rises even further to 67% for those looking to buy their first home. Affordability of mortgage payments is also a significant obstacle, with almost two-thirds (60%) citing this. This is similar for first-time buyers at 61%.
Some 43% of people said accessing a large enough mortgage is a hurdle to buying a home in the UK. This rises to almost half (48%) for first time buyers.
A lack of job security has started to nudge up as a barrier to buying a home. More than a quarter (26%) now say this is an issue, compared to less than one in five who said it was an obstacle two years ago (19% in Jun 23). This likely reflects the slow but gradual increase in unemployment and the fall in job vacancies in recent years.
Overall, the Building Societies Association study shows confidence in the housing market remains low. Just 15% of people think now is a good time to buy a property, a decline from one in five (20%) at the start of this year (Jan 2025). Almost double this (36%), do not think it is currently a good time to buy a home.
Despite house prices remaining relatively stable this year, around half (44%) of the population think they will rise over the next 12 months, with only one in eight thinking they will fall.
Looking at renters aged 18-24, who are expected to be the next generation of homeowners, we see hope and hesitation. The majority aspire to home ownership, with 86% saying they would like to get on the property ladder.
Many are optimistic about when they will achieve this, with over a quarter (28%) believing they will become a homeowner in the next five years. However, one on five (19%), don’t think they will ever be able to achieve this, up from just 12% five years ago.
A spokesperson for the BSA says: “Our studies into first-time buyers show that they face the toughest conditions in over 70 years. 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 the next generation. Every day that passes without real action raises the number of potential lifetime renters.”
