First-time buyers should be an integral part of the government’s plan to ‘bring back hope’

Palma Oxley is a Researcher at the Fabian Society, working at the Fabian Housing Centre

In his first speech as Prime Minister, Andy Burnham promised to ‘bring back hope’. For many, the opportunity to own a home is an important part of that promise, offering greater financial security, lower housing costs and a better quality of life. 

Young people across Britain find it harder than ever before to become homeowners. The price of the average home has grown by almost 20 per cent in real terms between 2005 and 2025, while wages have grown by just 6 per cent. The average property in England is now 7.6 times average income, compared to 6.8 twenty years ago. Even regions with historically low house prices have faced rapid house-price inflation, with prices rising by 10 per cent in the East Midlands and 15 per cent in the North West over the past decade. 

Today, people have to save more and for longer. The average first-time buyer deposit has grown by 38 per cent in real terms in the past 10 years alone, reaching over £78,000. Yet the majority of renters (64 per cent) have fewer than £16,000 in savings. For someone able to put away half of their income after essential costs, it would take more than 12 years to save for the deposit on an average new build. In London, this could take 30 years. Of course, few people are able to save at this rate, as rents, student loan repayments, and the cost of living constrain their ability to save. Aspiring buyers on low incomes and with children are even more disadvantaged.

As house prices become increasingly divorced from average incomes, people are becoming more reliant upon the ‘bank of mum and dad’ to buy their first home. Analysis by Savills found that the number of first-time buyers receiving family assistance has risen from 47 per cent to 53 per cent over the past 10 years. It estimates that £8.3bn was paid out by parents in 2025, compared with £5.7bn in 2015. Increasingly, the ability to buy a home depends less on how hard someone works and more on the wealth and support of their family. It is no surprise that aspiring buyers are losing faith in the system, politics and the future of the country. 

In response to the challenges facing aspiring first-time buyers, the government has announced Your First Home, a deposit support scheme designed to help people onto the property ladder. The scheme will provide aspiring first-time buyers with a 2.5 per cent deposit with an equity loan of 20 per cent of their property’s value. The government estimates that this will help 70,000 households to become homeowners. 

However, more needs to be done to ensure that homeownership is not an opportunity reserved for those from more affluent backgrounds. In Keys to the Future, the Fabian Housing Centre sets out a package of measures to help aspiring first-time buyers overcome the remaining barriers to homeownership.

The government should introduce a renter savings scheme that would allow tenants to save an additional 5 per cent of their rent, matched by their landlord and the government. Modelled on workplace pensions, the scheme would turn regular rental payments into an opportunity to build a deposit. Over 13 years, this could help tenants save £20,000 in England and almost £32,000 in London. The government should also introduce a junior housing ISA, helping families to save for their children’s future deposit. This would be backed by government contributions for children from low-income families.

Aspiring buyers also need access to, and awareness of, more affordable mortgages with lower interest rates. The government should improve access to mortgages with just a 5 per cent deposit by reforming the guarantees it provides to lenders. It should also establish a national first-time buyer advice service to help people navigate the mortgage market and understand the homeownership schemes available to them. Taken together, these proposals would help make homeownership less dependent on when someone was born or how much their parents earn. 

A country that offers hope to young people is one where homeownership is an achievable ambition, bringing greater financial security, lower housing costs and higher life satisfaction. Your First Home is a welcome first step, but the government must go further. By helping people to build savings and access affordable mortgages, it can ensure that the opportunity to own a home depends less on the ‘bank of mum and dad’ and more on their own hard work and ambition.