"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 every day that passes without real action, the number of potential lifetime renters is growing"
- Paul Broadhead - BSA
A new report from the Building Societies Association (BSA) found that many potential first-time buyers have failed to get on the property ladder since the financial crisis.
Analysis of historic first-time buyer data shows that around 7.2 million individuals or couples would have been expected to buy their first home since 2006. However, only 5 million achieved homeownership now, meaning 2.2 million missing first-time buyers from the property market are missing.
The new findings are part of an update to the comprehensive First-time Buyers: Age-old Problems, Modern Solutions report published last year.
Missing millions affordability challenges
Today’s first-time buyers face a double affordability challenge, an almost record-high cost of buying a home and the end of record-low mortgage rates. As a result, repayments as a proportion of income for new first-time buyers have increased by around 30% (22% of income) since their low in 2020 (18% of income).
Recently, mortgage rates have started to ease, and further Bank Rate cuts, which are expected this year, should help improve repayment affordability.
However, in the BSA’s April 2025 Property Tracker, first-time buyers are still ranking mortgage affordability as the biggest barrier to buying a home, with 65% selecting this. Raising a deposit was also highlighted as a significant obstacle to homeownership, with 62% of would-be homebuyers citing this.
Most successful first-time buyers are stretching themselves to get on the property ladder, with many using higher loan-to-income and higher loan-to-value mortgages to mitigate the challenge of raising the initial deposit. Choosing to have a higher monthly repayment, supported in part by wage growth, is likely to be the biggest factor that has enabled successful first-time buyers to achieve homeownership.
Who are the missing millions?
During the immediate aftermath of the financial crisis, the missing buyers were broadly split across all age groups, but in more recent years, they have tended to be those in the younger bracket – particularly those under 30.
Initiatives aimed at increasing first-time buyer numbers in the future will therefore need to target both younger borrowers whilst also supporting those that missed getting on the property ladder at a younger age and failed to catch up at a later age.
Missing millions are stuck renting
The biggest challenge to increasing first-time buyer numbers is enabling younger and lower-income borrowers to have an opportunity to buy their own homes.
Many are currently stuck in the private rented sector, where rental repayments as a proportion of income are significantly higher than mortgage repayments, even when the recent rise in mortgage rates has been considered. This severely limits the ability of those in the private rented sector to save for a deposit.
Higher loan-to-value mortgages can help more private renters to buy their first home, but not all. Whilst some 95% and higher loan-to-value loans can be found today, their availability has been more limited since the financial crisis. Also, they are not a one-stop solution for all potential first-time buyers. Last year’s report showed that with a 95% loan-to-value mortgage, just 19% of private renters could afford to buy a £100,000 home.
Solutions to support the missing millions
The increased growth in house prices relative to incomes is the major underlying issue preventing first-time buyers from getting on the property ladder. However, a number of Government and regulatory policy actions could help address this.
A clear Government long-term strategy aimed at supporting not only today’s first-time homebuyers but also the prospects for future generations, is required. Working collaboratively with lenders, the wider housing market industry, and the public, the focus needs to be firmly on making homes more affordable, more available, and more appropriate to the needs of those living in them.
BSA suggests that we need to stop solely focusing on demand-side interventions and focus on supply, too, adding that the government must continue to build on its actions to support the housing market, as the changes announced so far will take time to filter through, and additional house building is likely to fall short of the ambitious target that has been set.
Alongside policy action, regulatory changes are also needed. Last year, the association highlighted how, since the financial crisis, the pendulum had swung too far towards a stricter regulatory environment rather than towards the social benefits of higher rates of homeownership. More flexibility to allow lenders to support first-time homebuyers is needed, such as an increase in the availability of 95% loan-to-value mortgages and a review of the cap on high loan-to-income lending.
“I’m disappointed that 12 months on from our first report, which highlighted the struggles faced by first-time buyers and the potential roadmap for change, the barriers to homeownership remain the same today," commented BSA head of mortgage and housing policy, Paul Broadhead.
He added, “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 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 whilst 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."
