"For many, in particular young people, homeownership is no longer just difficult; it is impossible without support. Government urgently needs to intervene and support buyers by establishing a new, fair and targeted scheme to restore affordability and access to homeownership"
- Neil Jefferson - Home Builders Federation
A new report from the Home Builders Federation (HBF) has revealed that only the top 30% of earners can afford to buy a home due to rising house prices, high mortgage costs, and a lack of government support. The situation has worsened in recent years, with many would-be buyers struggling to enter the housing market.
The report Broken Ladder: Stairway to Never highlights how the absence of government assistance, combined with a lack of affordable mortgage options, has made homeownership unattainable for a large number of younger buyers. The report compares the current housing situation with that of previous generations, who benefited from government support to help them buy homes and details the growing inaccessibility of the market for younger households.
“This is the first time in decades that first-time buyers have been without government support. Our analysis shows that homeownership is now only possible for those with higher incomes or significant family wealth,” says the HBF. “As a result, many people who could afford a mortgage are stuck renting indefinitely, unable to save for a deposit while dealing with increasing living costs.”
The report also notes that when the Help to Buy scheme ended in 2022, a dual-income household needed to earn around £25,000 per person to afford a new home costing £302,916. Today, however, such a household needs to earn more than £37,000 each, effectively excluding many potential buyers.
HBF’s data indicates that Help to Buy mainly supported moderate-income households. “Nearly all participants earned under £60,000, and 85% were first-time buyers,” the report states. “The scheme also proved profitable for taxpayers, with 40% of loans fully repaid, generating a £718 million return on investment by March 2024.”
“The lack of affordable mortgage availability and support for buyers has created a significant barrier, between aspiring homeowners and their first step onto the ladder," explained HBF CEO Neil Jefferson.
He added, "For many, in particular young people, homeownership is no longer just difficult; it is impossible without support. Government urgently needs to intervene and support buyers by establishing a new, fair and targeted scheme to restore affordability and access to homeownership.
“Supporting buyers would not only provide a new generation with the benefits homeownership brings, but it would also directly lead to an increase in home building, creating jobs and boosting economies across the country.”
HBF is urging the government to introduce a new, targeted equity loan scheme to help first-time buyers. The proposed scheme would support deposit savings with a government-backed equity loan and be partly funded by a developer fee. It aims to improve affordability, encourage lender participation, and make the scheme accessible to smaller housebuilders.
