Three quarters of 25 to 34-year-olds in Britain still want to own a home. By the time they reach 45, fewer than four in ten do. The drop isn’t because older renters suddenly decide they prefer paying someone else’s mortgage. It’s because they’ve given up.
Yorkshire Building Society’s new report, No Way Home? Restoring Britain’s Housing Ladder, puts numbers to what brokers and agents have sensed for years: the aspiration gap is widening into a chasm. While 76% of younger adults dream of ownership, only 11% of renters aged 20 to 44 in England are actually in a position to buy.
The barriers are familiar but no less brutal for being well-documented. Of renters who still hope to buy, 31% said they simply don’t have enough savings for a deposit. The same proportion said higher mortgage rates would make monthly payments unaffordable. And 56% of aspiring homeowners believe it would be difficult even to get accepted for a mortgage, with 44% blaming high living costs as the primary obstacle.
Tom Simpson, managing director of homes at Yorkshire Building Society, didn’t mince words. “Britain hasn’t fallen out of love with homeownership,” he said. “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.”
He warned the UK “may already be seeing the early effects of a lost generation” of would-be homeowners, with older millennials now in their mid-40s and younger cohorts at risk of following the same trajectory.
The Cambridge Building Society this week opened its 98% loan-to-value First Step mortgage to all intermediaries. Priced at 5.89% on a two-year fix, the product allows first-time buyers to borrow against a maximum property value of £500,000 with just a 2% deposit. The mutual will lend up to 5.5 times income and accept gifted deposits and new-build houses, though not new-build flats.
It’s a meaningful product for buyers who can demonstrate affordability but lack capital. Dan Barker, product and propositions manager at The Cambridge, said the aim was to give brokers “another route to consider for eligible clients looking to borrow up to 98% LTV” where a low deposit is the main barrier.
Yorkshire Building Society’s own modelling suggests that improving the availability of 5% deposit mortgages alone would enable 67,000 additional homeowners to join the property ladder. The society is calling on the PRA and FCA to simplify the responsible use of existing mortgage flexibility, allowing lenders to support creditworthy borrowers through “judgement-led underwriting” rather than rigid criteria.
Beyond deposits and rates, there’s a subtler problem. Many potential buyers don’t know what they don’t know. Yorkshire Building Society found that knowledge gaps and financial obstacles were “distinct barriers”, meaning some people who could technically afford to buy don’t realise they can, and others who can’t aren’t getting early enough guidance to change their position.
For repeated renters, the report identified a pattern of “learned exclusion”, where years of failed attempts, adverse credit events and liquidity pressures cause households to disengage from the idea of ownership entirely. They stop checking mortgage calculators. They stop saving for deposits. They stop believing.
Jon Cooper, head of mortgage distribution at Aldermore, made a similar point. Even when comparing house price growth to wage growth over the past five years, he said, there’s a 10% gap that continues to push first-time buyers further from the deposit they need. “Still, customers sit there today, thinking and feeling: ‘I can’t get on the housing ladder.’ That’s the biggest crime,” Cooper said.
The national picture plays out with particular intensity in the eastern counties. Lloyds’ latest data, published this week, puts the average first-time buyer property at £240,433 nationally, with annual price growth for this group accelerating to 0.8% in June from 0.3% in May.
In Norwich, where starter homes in popular areas regularly exceed £200,000, a 2% deposit on a £250,000 property amounts to £5,000. That’s achievable for some. But at 5.89%, the monthly repayments on a 98% LTV mortgage of £245,000 over 30 years would sit close to £1,450, a significant commitment alongside the region’s typical rental costs that make saving difficult in the first place.
Across Wymondham, Attleborough and the market towns stretching south toward Thetford, slightly lower price points offer a more realistic entry, though affordability constraints remain tight. The Ivybridge Collection’s 324-location property market reports show significant variation in pricing, demand and buyer activity from one town to the next, making local knowledge essential for buyers weighing their options.
Simpson’s most pointed observation wasn’t about any single mortgage product. It was about the housing system as a whole. “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,” he said. “Helping people become ready to buy, helping more people access ownership, and making it easier for them to move on when the time comes.”
The current political uncertainty doesn’t help. With a new Prime Minister yet to be confirmed, housing policy sits in limbo. Trial balloons about property taxation continue to surface, and the Government’s 1.5 million new homes target by 2029 remains more aspiration than plan, despite Housing Minister Matthew Pennycook’s claim this week that new-build starts have risen 15% in the past year.
The risk isn’t that house prices crash or soar. It’s that an entire cohort quietly accepts that ownership isn’t for them. The data suggests this is already happening. When aspiration drops from 76% among 25-year-olds to 20% among those in their late fifties, that isn’t a housing market adjusting. It’s a generation being priced out and tuning out.
Products like The Cambridge’s 98% mortgage and calls for more flexible underwriting are steps in the right direction. But individual interventions won’t bridge a systemic gap. Until deposit requirements, wage growth, mortgage affordability and housing supply are addressed as interconnected problems rather than separate policy challenges, the ladder will keep pulling away from those trying to reach it.
