Yorkshire Building Society has warned that the UK is at risk of sleepwalking towards a ‘lost generation of homeowners’.
Its new research reveals a growing gap between people’s aspirations and their belief that they can ever achieve them.
The society’s latest housing market report, No way home? Restoring Britain’s Housing Ladder, shows that while homeownership remains one of the strongest shared ambitions in the UK, confidence in achieving it falls sharply as people get older — particularly for those who have not bought by their mid-40s.
While 76% of 25 to 34-year-olds and 59% of 35 to 44-year-olds aspire to buy a home, this falls sharply to just 38% of 45 to 54-year-olds.
Just 20% of 55 to 64-year-olds continue to hang on to hope, and the window of opportunity closes still further after that, at only 8% of over-65s.
Given 45 is the age of the oldest Millennial, this suggests that if people haven’t achieved their dream of owning their own home by then, they assume they might never do so.
OUT OF REACH
The report found a range of real and perceived barriers are contributing to their declining hopes, including difficulty saving for deposits, affordability pressures, lack of confidence in navigating the mortgage process, limited supply of suitable homes and high costs and friction when moving.
This is sharply at odds with the fact that 88% of UK adults believe homeownership is important, making it one of the most widely shared goals in today’s society.
Tom Simpson, managing director of homes at Yorkshire Building Society, said: “Britain hasn’t fallen out of love with homeownership — far from it. People still see owning a home as central to their stability, their security and their future.
“But what’s changing is belief. For too many people, particularly those who haven’t bought by their late 30s, the dream starts to feel out of reach.
“With older Millennials now reaching their mid-40s, at Yorkshire Building Society we are concerned that the UK may already be seeing the early effects of a lost generation — and without action, this risk could extend to younger cohorts.
“If we want that opportunity to exist for the next generation, the time to act is now.”
TIME TO ACT
The reasons people gave for wanting to own their own place included stability (64%), long-term financial security (54%) and the ability to build an asset (52%) — hopes which were strongly reflected across both renters and homeowners, and younger and older generations.
The report calls for a smarter housing system and offers up a blueprint for a more coordinated approach to restoring the housing ladder — focused on helping more people get ready to buy, through earlier guidance and clearer pathways.
As well as expanding access to homeownership, including better use of existing lending flexibility; unlocking more housing supply, including enabling more repurposing of existing buildings — and improving mobility, so that people can move as their needs change.
Among its proposed solutions are a review of Stamp Duty Land Tax and the introduction of a more fit-for-purpose version of the discontinued Help to Buy scheme.
Tom added: “Fixing the housing ladder isn’t just about helping people take their first step — it’s about making sure they can move through it as their lives change.
“We need government, industry and lenders to come together as they never have done before, to create a system that works from start to finish: helping people become ready to buy, helping more people access ownership, and making it easier for them to move on when the time comes.
“That’s what a functioning housing market should do — and right now, it isn’t doing it well enough.
MORE GOVERNMENT SUPPORT
Kate Davies, executive director of the Intermediary Mortgage Lenders Association (IMLA), welcomes the findings.
She commented: “The report makes a compelling and evidence-based case for why homeownership still matters deeply to people, despite becoming increasingly difficult to achieve.
“At IMLA we have long argued that buying a home remains one of the most effective ways for ordinary households to build long-term financial security.
“Yorkshire Building Society’s research reinforces that conclusion, estimating that today’s younger generations could face a wealth gap of up to £1.6 million by retirement if they never get onto the housing ladder.
“That chimes closely with IMLA’s own research, which has consistently shown that the long-term financial cost of remaining outside homeownership can be enormous.”
Davies said the report also highlighted an issue the mortgage industry must continue to address.
“One of the most striking findings is that many aspiring first-time buyers assume they cannot obtain a mortgage when, in reality, they may be much closer than they think.
“Mortgage lending has evolved significantly in recent years, with lenders introducing innovative products, higher loan-to-value mortgages, more flexible affordability assessments and solutions designed specifically to help first-time buyers.
“Too many people simply rule themselves out before ever speaking to a mortgage adviser. Our message would be straightforward: don’t make assumptions. Speak to an adviser and understand what options are actually available.”
IMLA also backed the report’s call for renewed government support for aspiring homeowners alongside measures to increase housing supply, and more support for landlords.
“Support for first-time buyers must always go hand in hand with increasing the supply of homes if we are to avoid simply pushing prices higher.
“We also believe government should recognise the important contribution responsible landlords make in providing homes for millions of renters.
“A healthy private rented sector and a healthy owner-occupied sector are complementary, not competing, parts of a well-functioning housing market.
She added: “The housing ladder only works when people can move onto it and progress through it. Restoring confidence in homeownership would benefit not just aspiring buyers but the wider economy, creating stronger housing chains, greater labour mobility and long-term financial resilience for millions of households.”
