For many first-time buyers and young families, owning a home feels further out of reach than ever. Over the past two decades, the average UK house price has surged from approximately £70,000 in 1998 to £224,000 in 2018, more than tripling in value. As of January 2025, the average house price stands at £267,200. This rapid increase has significantly outpaced wage growth, making homeownership increasingly unaffordable. In 2023, the average house price was 8.6 times the average annual disposable household income, up from 4.4 times in 1999.
These financial barriers have led to a decline in homeownership among young adults. In 2022–23, only 39% of individuals aged 25 to 34 owned their homes, a significant drop from 59% in 2000. This decline is particularly pronounced in urban areas like London, where only 26% of young residents own a home with a mortgage, compared to 36% outside the capital.
Even after securing a mortgage and purchasing a home, financial challenges persist. Ongoing expenses such as Council Tax, maintenance, and rising utility bills add to the financial strain, making it difficult for young homeowners to manage their budgets.
With homeownership becoming increasingly difficult for young people, it’s crucial to examine the factors hindering their ability to buy and own homes. Implementing policies that address these issues can help make homeownership more attainable and equitable for future generations.
The Barriers to Buying a First Home
Saving for a Deposit Takes Longer Than Ever
House prices have risen far faster than wages, making it increasingly difficult for young buyers to save enough for a deposit. In many parts of the country, buyers now need between £30,000 and £50,000 upfront just to secure a mortgage.
According to the Resolution Foundation, it now takes the average first-time buyer around 9 years to save for a deposit – and that’s assuming they can save regularly. For many, homeownership is only possible with significant financial support from family, often dubbed the ‘Bank of Mum and Dad’. In fact, more than half of all first-time buyers under 35 now rely on family help to get on the property ladder.
Meanwhile, rising rents are making it even harder for renters to save. With average rents hitting record highs, young people are often stuck in a cycle where they’re paying more each month in rent than they would on a mortgage – but can’t build up the deposit to break free.
Mortgage Affordability is a Growing Issue
Even with a deposit, getting a mortgage is tougher than it used to be. Higher interest rates mean monthly repayments are more expensive, making lenders more cautious about approvals. Many buyers are forced to take out longer mortgages (35-40 years) just to make payments manageable, increasing their overall debt.
First-Time Buyers Are Priced Out of Their Local Areas
Many young people find themselves pushed further away from where they grew up or work because local prices are too high. This means longer commutes, higher transport costs, and difficulty accessing family support for childcare. Some areas have seen a rise in second-home buyers and investors, driving up prices and pushing out locals.
The Hidden Costs of Homeownership
Once buyers secure a mortgage, they often underestimate the ongoing costs of owning a home.
These include:
- Council Tax – which can be surprisingly high, especially in lower-cost areas.
- Repairs and maintenance, which renters typically don’t have to worry about.
- Service charges in flats and leasehold properties, which can be an unexpected financial burden.
And we can’t forget Stamp Duty – a one-off cost paid upfront at the time of purchase. Unless they qualify for first-time buyer relief, many buyers still face thousands in additional charges just to complete the purchase. It’s another hurdle at a time when affordability is already stretched thin.
How Can We Make Homeownership Fairer for First-Time Buyers?
There’s no single fix, but policy changes could ease the financial strain on first-time buyers and young families, helping more people get on the property ladder.
One of the biggest hidden costs for homeowners is Council Tax – an outdated system that doesn’t fairly reflect property values. Many young buyers moving to affordable homes in lower-value areas end up paying disproportionately high Council Tax bills, which eat into their monthly budget.
And then there’s Stamp Duty, a one-off charge that adds thousands to the cost of buying a home. For buyers looking to move up the property ladder – especially growing families – this can be a major barrier.
Switching to a Proportional Property Tax (PPT) would make homeownership fairer by ensuring everyone pays the same percentage of their property’s actual value – not an outdated amount based on 1991 prices. It would also scrap Stamp Duty altogether, removing a major upfront cost for buyers.
This would mean:
- Lower annual bills for most first-time buyers and young families
- No Stamp Duty for anyone, at any stage of the ladder
- A tax system that reflects the true value of homes today
- More financial breathing room for those just starting out
For years, politicians have promised to help first-time buyers – but schemes like Help to Buy and shared ownership haven’t tackled the deeper issue: the cost of owning a home is unfairly high, especially for those just starting out.
A fairer tax system – like Proportional Property Tax – would not only ease the burden, but give a generation of would-be homeowners a fighting chance to get ahead.
If we want future generations to have a fair shot at homeownership, we need action now.
Join the movement for a modern, fair property tax system – because owning a home shouldn’t be a luxury, it should be an achievable goal for everyone.
Read more from Lord David Willetts here on why Council Tax reform is key to bridging the generational divide.