A new report from the Building Societies Association (BSA) suggests that a significant number of potential first-time buyers have failed to get on the property ladder since the financial crisis.
BSA 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 five million achieved homeownership, resulting in 2.2 million first time buyers ‘missing’ from the market.
‘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’ the BSA said. ‘As a result, repayments as a proportion of income for new first-time buyers have increased by around 30% (22% of income) since its low in 2020 (18% of income).’
Although mortgage rates have started to come down and further bank rate cuts are expected, the BSA’s April 2025 property tracker found that 65% of first-time buyers still rank affordability as the biggest barrier to buying a home. Raising a deposit was cited as a major obstacle by 62% of respondents.
Paul Broadhead, head of mortgage and housing policy at the BSA, said of the figures:
“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.”
The BSA is calling for higher loan-to-value mortgages targeted at private renters to help them onto the property ladder, for younger borrowers aged under 30 as well as those who missed out on deals before the financial crash and have been unable to catch up.
‘Whilst some 95% and higher loan-to-value loans can be found today, their availability has been more limited since the financial crisis,’ the BSA said. However, it acknowledged the products are not a ‘one-stop solution’, adding: ‘Last year’s report showed that with a 95% loan-to-value mortgage, just one in five (19%) private renters could afford to buy a £100,000 home’.
The government’s housebuilding targets should also be supplemented with interventions on the supply side, the BSA suggests, including a relaxation of the regulatory landscape and working collaboratively with lenders and the wider housing market industry:
‘Last year we 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.’
Broadhead concluded:
“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.”
