With the cost of housing prohibitive to many first-time buyers, it’s time the government intervened, for the sake of them and the wider market, says Stewart Baseley, chairman of the Home Builders Federation.
As we approach nearly one year since the government started its term, it has proposed a number of policy interventions. This began almost immediately with the reintroduction of mandatory housing targets for local authorities, with the ambition of delivering 1.5 million homes over five years.
These interventions continued with significant reform to the planning system, aimed at unblocking housing delivery. A strategic review of greenbelt land has been initiated to ensure that development is focused in areas with the greatest need and potential for growth. Alongside this, the revival of New Towns promises to inject scale and ambition into national housing policy, creating well-planned communities with essential infrastructure from the outset.
Looking ahead, the Planning and Infrastructure Bill is set to streamline approvals and accelerate the delivery of vital projects, signalling a renewed commitment to tackling the structural barriers that have long constrained supply.
While it remains to be seen if these interventions will increase housing supply, affordability remains an acute concern. The government must remember that builders can only build if buyers can buy.
Recent research from Public First, supported by the Home Builders Federation, finds that just 10.4% of 20 to 44-year-olds who don’t currently own a home are financially able to purchase one. For single adults, that figure drops to 2.9%.
According to HBF’s Broken Ladder: Stairway to Never report, the average deposit now requires saving 50% of discretionary income for almost a decade – and even longer in London and the South East. The average mortgage payment for a first-time buyer now consumes 67% of net income. This is not a marginal shift – it is barring an entire generation from homeownership.
At the same time, demand remains strong: 94% of non-homeowners aged 18 to 44 say they would like to own a home, and public polling shows deep concern about the implications of falling home ownership for social cohesion, wealth inequality, and generational fairness.
The implications for housing delivery are profound. First-time buyers account for a third of all housing transactions – and more in urban centres like London. If young buyers are unable to enter the market, developers face reduced demand, which in turn
reduces supply. A housing market without new entrants simply cannot sustain the level of development the government is targeting.
A shrinking pool of effective demand also carries significant economic consequences. The Office for Budget Responsibility’s forecast of 305,000 home completions annually by 2029/30 is underpinned by assumptions about rising housing demand. If that demand fails to materialise, the knock-on effects on public finances and broader economic growth could be severe. The government’s entire housing and fiscal strategy hinges on supporting new supply – and that, in turn, depends on expanding access to ownership.
While past schemes like Help to Buy supported hundreds of thousands of buyers – nearly 400,000 purchases over its lifespan – there is currently no significant government-backed support scheme in place.
The resulting affordability gap has widened to the point where, by the end of 2023, a buyer would need to be in the 69th income percentile to afford an average new build home. Just a few years ago under Help to Buy, this threshold was 25 percentage points lower.
The case for action is clear: the introduction of a new equity loan scheme. Modelled on the most successful aspects of Help to Buy but updated to reflect today’s challenges, HBF proposes a scheme that offers first-time buyers a 20% government equity loan (40% in London), reducing their required deposit to 5% and helping them secure more affordable mortgages at lower loan-to-value ratios. Developers would contribute a modest fee, ensuring the scheme is financially sustainable and accessible to smaller builders.
Economic modelling suggests that such a scheme could enable 490,000 additional young people to buy their first home, deliver 98,500 new homes over five years, and generate £28.5bn in economic activity.
Crucially, the scheme would level the playing field for those without access to family wealth – an increasingly important equity issue in a society where home ownership is becoming the preserve of the privileged.
The political case is just as strong. Public support for a new equity loan scheme is high across the board, with 69% of all voters and 74% of ‘Labour switchers’ backing the idea. First-time buyer support is not just an economic imperative – it’s a political opportunity. Restoring the dream of ownership to ordinary working people is a policy goal that resonates deeply across age groups, regions, and income levels.
Without decisive intervention to improve affordability and support first-time buyers, the UK risks locking a generation out of ownership, undermining housing delivery, and stalling economic recovery. An updated equity loan scheme, underpinned by industry partnership and smart fiscal design, represents the most targeted, scalable, and politically viable solution currently on the table.
If we are to meet the nation’s housing needs, secure generational fairness, and stimulate the economic benefits of a healthy housing market, we must urgently reinstate targeted support for first-time buyers. Demand is the engine of development – and right now, that engine is stalling.
This article was first featured in Show House Magazine. Read more like this and the latest industry insight here.
