Why buying a first home remains so difficult for younger generations
House prices have begun growing more slowly than wages, but decades of rising property values, expensive rents and insufficient housing supply continue to make home ownership diffi
By BBC News
Young adults face a substantially more difficult route into home ownership than previous generations despite recent signs that housing affordability is beginning to improve.
Long-term increases in property prices have left the cost of buying a home much further ahead of earnings than it was for many buyers several decades ago.
That has made raising a deposit and securing a sufficiently large mortgage particularly difficult for people attempting to buy their first property.
Analysis highlighted by the BBC suggests people born in the mid-1990s have experienced markedly lower home ownership rates at comparable ages than generations before them.
One of the biggest factors has been the relationship between property prices and earnings.
Official figures from the Office for National Statistics show that the median home in England cost £300,000 in 2025.
Median annual earnings for a full-time employee were £39,300, putting the average affordability ratio at 7.6 times earnings.
That is a substantial barrier for buyers attempting to purchase without significant savings, family assistance or two incomes.
Housing supply is another part of the problem.
For years, the number of additional homes delivered has fallen short of the levels successive governments have said England needs.
Building substantially more homes is not straightforward.
Land values, planning constraints, labour shortages and the rising cost of construction materials all affect whether developments are financially viable.
Construction costs increased particularly sharply following the Covid pandemic, when supply-chain disruption and shortages pushed up prices for many building materials.
Energy and material costs were subsequently affected by Russia’s invasion of Ukraine and the inflationary pressures that followed.
At the same time, prospective first-time buyers have faced another problem: the cost of renting while trying to save.
For households spending a substantial proportion of their monthly income on private rent, accumulating tens of thousands of pounds for a deposit can take years.
That has contributed to some younger adults remaining in their family home for longer where that option is available.
There are, however, signs that the affordability gap has begun moving in a more favourable direction.
ONS figures show average earnings have been increasing faster than average house prices since the affordability ratio peaked in 2021.
Median house prices increased by around 5% between 2021 and 2025, while average earnings rose by approximately 25%.
As a result, England’s house-price-to-earnings ratio has fallen to 7.6, its lowest level since 2015.
That does not mean homes have suddenly become affordable.
The ONS uses five times annual earnings as a broad indicator of affordability, leaving the national ratio well above that level.
Mortgage products can also make a difference to the size of the initial hurdle.
Some lenders offer mortgages requiring deposits of around 5%, reducing the amount first-time buyers need to accumulate before purchasing.
Longer mortgage terms can also reduce monthly repayments by spreading the debt over a greater number of years.
A 35 or 40-year mortgage may therefore allow some borrowers to purchase a property that would be difficult to afford using a traditional 25-year term.
But both approaches involve trade-offs.
A smaller deposit normally means borrowing a larger proportion of the property’s value, while extending the mortgage term can substantially increase the total interest paid over the life of the loan.
Buyers with very small deposits are also more exposed if property prices fall shortly after they purchase.
There are signs of continued strength in the North West housing market.
The latest UK House Price Index showed the average first-time buyer property in the North West at about £190,000 in May, considerably below the England average of approximately £244,000.
However, prices paid by North West first-time buyers were also 5.9% higher than a year earlier.
For younger buyers, therefore, the picture remains mixed.
Improving wages relative to house prices and the availability of low-deposit mortgages can make buying more achievable for some households.
But high property values, rents, borrowing costs and the difficulty of accumulating a deposit mean the route into ownership remains considerably more challenging than headline house-price movements alone suggest.
In the longer term, increasing the supply of homes remains central to attempts to improve affordability.
Planning reform may help make more land available, but new developments take years to move from policy announcements and planning applications to completed homes.
For today’s prospective first-time buyers, the recent improvement in affordability is encouraging, but it does not reverse decades in which property prices became increasingly detached from the incomes of the people trying to buy them.