9:27 AM, 7th May 2025, About A week ago 5
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Around 2.2 million potential first-time buyers have been unable to purchase a home since the 2006 financial crisis – and they face a lifetime of renting, a report reveals.
According to a Building Societies Association (BSA) study, there were 7.2 million individuals or couples expected to become homeowners, but only 5 million succeeded, leaving millions stuck in the PRS.
The findings, part of an update to the BSA’s First-time buyers report, highlight a deepening affordability crisis.
Aspiring homeowners face soaring property prices and the recent end of historically low mortgage rates.
For new buyers, repayments now consume 22% of income, up 30% from a low of 18% in 2020.
Paul Broadhead, the BSA’s head of mortgage and housing policy, said: “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.”
He added: “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.”
Despite slight relief from easing mortgage rates and anticipated Bank Rate cuts in 2025, the BSA’s April 2025 Property Tracker shows 65% of first-time buyers still view mortgage affordability as their primary obstacle.
Also, 62% struggle to save for a deposit, forcing many to rely on high loan-to-income or high loan-to-value mortgages to bridge the gap.
The report notes that while early post-crisis years saw missing buyers across all ages, recent trends skew toward those under 30.
This shift underscores the need for targeted support for younger borrowers and those who missed earlier opportunities to buy.
Many remain trapped in rented homes, where rents often outstrip mortgage repayments, making it nearly impossible to save for a deposit.
High loan-to-value mortgages, such as 95% or above, offer some hope but remain limited since the financial crisis.
Last year’s report revealed that only 19% of private renters could afford a £100,000 home with such a loan, underscoring the scale of the challenge.
The BSA is now urging a long-term government strategy to tackle the housing crisis, emphasising both supply and demand solutions.
Rising house prices far outpacing income growth remain the core issue and the report advocates for increased availability of 95% loan-to-value mortgages.
It also calls for a review of restrictive high loan-to-income lending caps, and a shift toward policies that prioritise homeownership’s social benefits.
Andy
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Sign Up11:34 AM, 7th May 2025, About A week ago
These are not 2.2m first-time buyers, they are 2.2m renters. If you can't afford to buy then you're a renter or stay-at-homer.
Also, the financial crisis was 18 years ago; if you haven't saved a deposit by now then it's time to hang up your "first-time buyer" hat.
NewYorkie
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Sign Up12:08 PM, 7th May 2025, About A week ago
This is hypocritical of the BSA.
There is a huge reservoir of untapped 'lower' priced homes, which were typically the choice of first time buyers... apartments (flats!), but which have been largely excluded from the mortgage market due to the perceived risks from leasehold.
I bought 2 flats in 2007, and had no problem obtaining 90% mortgages. Jump forward 5 years, and suddenly those same lenders won't lend of the same properties.
This has resulted in millions of leaseholders being stuck in flats which are no longer suitable for them; too small, wrong location, because they cannot sell.
Lenders won't explain why they won't lend, except to mention ground rent, forfeiture, they need a DoV which, of course, freeholders won't offer. There hasn't been a single case of forfeiture for non*payment of ground rent, and if forfeiture is threatened, the lender simply adds the 'debt' to the mortgage.
THERE IS NO RISK! SO, WHAT'S THE PROBLEM?
Remove that one small requirement, and the first time buyer market will take off, and the valuation of flats will increase to what they were when they were originally mortgaged.
Chris Bradley
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Sign Up6:47 AM, 8th May 2025, About A week ago
I took tenants on 4 years ago, and they indicated that they wanted to buy in 5 years. We have offered them the property as we want out. But even though our rent was the highest 4 years ago because the house was newly refurbished, the annual rent increases at the rate of inflation have fallen behind market rent and fallen behind mortgage payments if they had a repayment mortgage. So buying a house would cost them more monthly even if they could get a mortgage, their age is against them. They are excellent tenants but we want out. But selling it tenanted won't be possible because the % compared to value will not attract a buyer. Stuck in a dilemma
NewYorkie
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Sign Up8:22 AM, 8th May 2025, About A week ago
It may feel like you are doing tenants a favour by keeping rents below the market, but it only takes a couple of interest rate rises to cause the landlord to struggle to break even, and then the problems begin when rents have to rise.
Decent long term tenants (of course they're long term!) suddenly become problem tenants because they don't/won't appreciate that you have been subsidising them for years. It's only then that they realise everything is much more than they are paying, but that doesn't necessarily mean they can't afford it.
Shelter, GR... are driving landlords to become tougher. I have found that hard, but had to remind myself they are not my friends, and businesses need to make a profit to survive.
DPT
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Sign Up10:12 AM, 8th May 2025, About A week ago
The article suggests that it's down to affordability, but this doesn't sound right. House prices crashed in 2008 and by 2009 were back to 2004 levels. The following decade also saw mortgages at historically low rates. It seems more likely that the introduction of mortgage regulation in 2004 was the more relevant factor. Was the 7.7m expectation perhaps based on market conditions in the sub-prime era that no longer applied? If so then this sounds more like a market correction. It sounds to me as though what the research really shows is that there have always been several million people in Britain that either can't afford to buy or for one reason or another are not 'lendable' and that successive governments have ignored the issue by cutting social housing building which has ultimately led to the current crisis