Yorkshire Building Society’s report, No way home? Restoring Britain’s Housing Ladder, showed that while 76% of 25-34-year-olds and 59% of 35-44-year-olds aspire to buy a home, this falls sharply to just 38% of 45-54-year-olds.
Just 20% of 55-64-year-olds aspire to homeownership, while for over-65s, the figure is only 8%.
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.”
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Unlocking mortgage guidance sooner for aspirational buyers
Of the renters who still hope to buy a home, 31% said they do not have enough savings for a deposit. Furthermore, 31% said higher mortgage rates would make monthly payments unaffordable, meaning they will stay within the rental market.
Some 56% of future homeowners believe it would be difficult for them to get accepted for a mortgage. When asked why, the most commonly cited reason by 44% of respondents was high living costs.
The findings showed only 11% of renters aged 20-44 are in a position to buy a home in England.
Moreover, the mortgage market itself seems hard to navigate for aspirational buyers. The society said clearer guidance on mortgage eligibility could help future homeowners overcome this barrier.
Yorkshire Building Society’s report modelled that improving the availability of 5% deposit mortgages would enable 67,000 homeowners to join the property ladder.
The report suggested that uncertainty regarding mortgage rates pervades the 20-44 age group. Potential homeowners should be given better mortgage guidance sooner to enable understanding of homeownership pathways.
The society identified that knowledge gaps and financial obstacles were both distinct barriers to homeownership. For repeated renters, the report suggested that long-term renting can reflect learned exclusion, whereby liquidity pressures and historical adverse credit cause households to disengage from ownership.
Strengthening housing chains
The report suggested that improving mortgage access within responsible limits and supporting low-deposit lending are among the solutions to enable transactions that are already close to happening and strengthen housing chains.
The society also proposed that the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) should simplify the responsible use of existing mortgage flexibility. This could improve lender confidence to support creditworthy borrowers through judgement-led underwriting and sustainable low-deposit lending in circumstances where affordability is strong.
For more than 50% of homeowners, mortgage lenders and banks are seen as the main actor responsible for ensuring that people can move up and down the housing ladder. For renters, this was just over 40%. Instead, the latter attributed the UK government as the most responsible actor for guaranteeing movements along the housing ladder.
Simpson 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.”
