A sharp rise in the number of first-time buyer homes now subject to stamp duty has highlighted the worsening affordability crisis gripping the UK housing market, with new research from the Skipton Group revealing the mounting financial barriers facing those seeking to get on the property ladder.
The findings, part of an update to Skipton’s First-time buyers: age old problems, modern solutions report, show that in April the proportion of local authority areas in England where the average first-time buyer property now incurs stamp duty almost quadrupled, leaping from 8.4% to 32%. The impact is especially acute in areas where prices have edged closer to the £425,000 threshold, resulting in an additional £6,250 in upfront costs for many prospective buyers.
Skipton’s Home Affordability Index paints a stark picture of the challenges confronting would-be homeowners. Based on its latest analysis, 90% of potential first-time buyers in Great Britain cannot afford a typical starter home in their local area. The lender’s findings echo data published this week by the Building Societies Association, which noted that a large cohort of would-be buyers have failed to make the transition from renting to ownership since the financial crisis of 2008.
Today’s buyers are grappling with what Skipton describes as a “double affordability challenge”: historically high house prices coupled with the loss of record-low interest rates. While mortgage costs have risen, the burden of rent continues to outpace even these higher repayments, with many renters trapped in a cycle of high monthly outgoings and limited ability to save.
GENERATIONAL CRISIS
The index also underlines how affordability pressures are worsening social inequality and delaying home ownership for an entire generation. In response, Skipton convened a cross-sector event at the House of Commons last month, bringing together senior figures from housing and financial services to discuss potential solutions. The aim, the group said, was to foster greater collaboration to address what it considers a systemic failure of the UK housing market.
Jen Lloyd, head of mortgages at Skipton Building Society, said: “Our Home Affordability Index completely reinforces the findings from the Building Societies Association, the country has a chronic lack of home affordability and last month’s reforms are undoubtedly making things much tougher. Significantly more first-time buyers are having to find additional funds, and we recognise the real financial struggles and anxiety this is undoubtedly causing people.”
She added that Skipton was “doing all we can” to respond, from designing more accessible mortgage products to engaging directly with policymakers. “Only actions, not words will change this and what’s needed is genuine collaboration across Government and the wider housing industry to solve what is ultimately a systemic issue.”
The Index update is part of the Skipton Group’s ongoing research and advocacy efforts around the affordability gap facing younger buyers. It builds on a growing body of evidence that supports calls for broader policy reform, including measures to ease access to mortgage finance and increase the supply of genuinely affordable homes.
