Unaffordable mortgages and a lack of Government support sees young people knocked off the housing ladder The share of people able to afford a home has plummeted due to rising house prices, mortgage costs, and lack of government support, with only the top 30% of earners able to buy.HBF’s latest report, Broken Ladder: Stairway to Never, highlights how the absence of a government support scheme for prospective buyers, amidst a lack of affordable mortgage lending, is making homeownership unaffordable for hundreds of thousands of would-be buyers. Comparing the situation today with the experiences of previous generations that were able to benefit from government assistance onto the housing ladder, the new research details the declining accessibility of the housing market for younger households.It is the first time in decades that first-time buyers are without support from a government initiative with the analysis finding that homeownership is now only attainable for those on higher incomes or with access to significant family wealth. As a result, despite being able to afford to service a mortgage, many are stuck renting indefinitely, unable to save for a deposit while paying ever-increasing living costs.Help to Buy, the most recent Government scheme to support buyers onto the housing ladder closed in 2022. At that time a two-income household typically needed to earn around £25,000 per person to afford a newly built home, which at the time cost an average of £302,916.Today dual income households each require incomes of over £37,000. Even accounting for salary inflation, this is a significant jump, effectively locking out a quarter of buyers who could previously have afforded to purchase.The report also tracks the history of other government initiatives which supported homebuyers with equity loans and shared equity products, including FirstBuy, HomeBuy Direct, and the original Help to Buy programme, which collectively supported hundreds of thousands into homeownership. In most cases, buyers could access mortgages with more affordable deposits and repayments. For example, under Help to Buy, average buyers typically required a deposit of just 5% and benefited from lower monthly costs due to reduced mortgage loan-to-value ratios.HBF’s data shows that Help to Buy primarily benefited moderate-income households. Nearly all users of the scheme earned below £60,000, and the vast majority (85%) were first-time buyers. Furthermore, the scheme has netted the UK Exchequer a significant profit. With 40% of all equity loans fully paid off, at the end of March 2024, the taxpayers’ return on investment was running at £718m, or a 9% uplift on the original value of those loans,With no active government scheme in place, current mortgage affordability rules now demand far higher incomes and deposits. This, coupled with rising interest rates and house prices, means a growing number of people who previously could have bought a home are being permanently excluded from the market.HBF is calling on the Government to introduce a new targeted equity loan scheme for first-time buyers. The proposal would support deposits with a government-backed equity loan and would be funded in part by a developer fee, ensuring value for taxpayers. By reducing the loan-to-value ratios for first-time buyers the scheme would help buyers access lower-cost mortgage deals. Crucially, this would allow moderate-income households to re-enter the market at a time when homeownership is slipping beyond reach.The proposed structure is designed to replicate the effectiveness of Help to Buy while offering improved affordability, encouraging lender participation, and making the scheme accessible to smaller and regional housebuilders.Neil Jefferson, Chief Executive Officer at HBF, said: “The lack of affordable mortgage availability and support for buyers has created a significant barrier, between aspiring homeowners and their first step onto the ladder. For many, in particular young people. homeownership is no longer just difficult; it is impossible without support.“Government urgently needs to intervene and support buyers by establishing a new fair, and targeted scheme to restore affordability and access to home ownership.“Supporting buyers would not only provide a new generation with the benefits home ownership brings, but it would also directly lead to an increase in home building, creating jobs and boosting economies across the country.”- ENDS -For media enquiries, or to arrange an interview, contact HBF’s communications team at media@hbf.co.ukNotes to the editorThe Home Builders Federation (HBF) is the principal representative body for private sector home builders and voice of the home building industry in England and Wales. HBF member firms account for some 80% of all new homes built in England and Wales in any one year, and include companies of all sizes, ranging from widely recognised national firms, through regionally-based businesses and small local companies: hbf.co.uk