First-time buyers face toughest test for 70 years, lenders say

The BSA’s report, written by housing analyst Neal Hudson, suggests home ownership among younger people has been in decline over the last 20 years.

First-time buyers faced the dual affordability struggle of raising a deposit to buy a home as well as paying a mortgage.

Although the cost of a deposit had been difficult for some time, the recent increases in mortgage interest rates had tightened the squeeze, the report said.

Paul Broadhead, head of mortgage and housing policy at the BSA, said: “Becoming a first-time buyer is possibly the most expensive it has been over at least the last 70 years, but a properly functioning housing market is dependent on first-time buyers being able to afford their first home.

“New thinking and radical changes are needed.”

At present, buying a home required two above-average incomes, the report said. House price growth has been higher than earnings growth for some time.