Almost a third of aspiring homeowners feel locked out of the housing market

Nearly one in three (29%) people who want to buy a home believe they will never be able to, according to new research from the Building Societies Association (BSA).

The BSA’s latest survey, conducted this month, shows that millions of would-be buyers face becoming 'Generation Rent'.

The biggest barriers to homeownership remain financial. Six in ten (58%) first-time buyers say raising a deposit is the main obstacle, and more than half (54%) point to the cost of monthly repayments. Despite recent regulatory changes giving lenders greater flexibility to support creditworthy borrowers, 47% still believe not being able to borrow enough is a major barrier to buy a home.

Policy uncertainty adds to consumer anxiety

New trends are also starting to emerge, with uncertainty around government policy adding to the problem. Over a quarter (26%) said stamp duty tax is now a barrier to buying a home, a huge increase from just 7% three years ago.

With property tax reform reportedly under consideration in the forthcoming Budget, speculation can stall transactions as buyers and sellers take a 'wait and see' approach, undermining confidence and momentum in the market. 

At the same time, frustration with the complexity of the homebuying process is at its highest ever level, with 14% now viewing it as a major barrier, up from 10% in July. This coincides with the Government’s consultation on reforming the home buying and selling process. The proposals have the potential to make buying and moving home simpler, quicker and less stressful, and it’s clear that this is needed to modernise and build confidence, particularly amongst first-time buyers. 

Confidence remains fragile

Sentiment in the housing market remains cautious. Less than one in five (17%) people think now is a good time to buy, compared with a third (33%) who disagree, giving a net confidence score of -16%. This represents a modest improvement on the summer, when the net score was -21%.

Almost half (44%) of non-homeowners say they expected to own a home by now, showing how far reality has drifted from aspiration.

The BSA’s earlier research into first-time buyers found that they face the toughest conditions in more than 70 years. Since the financial crisis, 2.2 million would-be first-time buyers who might reasonably have expected to own their own home have been unable to do so. The research suggests that this number will potentially grow, as the proportion of 25-44 year olds who feel homeownership is completely out of their reach has risen from 27% in 2020 to 33% today. 

Paul Broadhead, head of mortgage and housing policy at the BSA, said: “For too many people, the dream of owning a home has turned into a sense of defeat. The financial barriers are well known, but it’s clear that policy uncertainty and the complexity of the process are now part of the problem too.

“Speculation about changes to property taxes may grab headlines, but it risks damaging confidence and creating unnecessary volatility. What buyers need most is stability, not stop-start interventions that distort the market.

“Building societies are working hard to support first-time buyers with flexible lending options and innovative mortgage offers. But lasting change requires a joined-up approach that focuses on housing supply, simplifies the buying process and creates the confidence that homeownership is achievable again. If we get that right, the future of the housing market can be a much brighter prospect for the next generation.”