Home Buying: What to Expect

With homeownership remaining a key aspiration for most people, rising house prices, increasing mortgage costs, and a persistent housing shortage in the UK are making that goal increasingly difficult to achieve.

A recent report by the Home Builders Federation revealed that only one in three earners can afford to buy a home.

The General Election has spotlighted critical issues in the housing market—including flaws in the planning system, limited support for first-time buyers, and growing imbalances between supply and demand.

‘Help to Buy’ Initiatives

The Home Builders Federation (HBF) have highlighted a widening affordability gap, with England’s average house price-to-income ratio now at 10. In high-demand regions such as the South East, South West, and East of England, this figure rises above 12—and exceeds 16 in London. As a result, the burden of mortgage repayments has grown considerably, increasing from 47% of the average net salary in 2014 to 67% in 2024.

Government-backed initiatives like ‘First Time Buyer’ support and the ‘Help to Buy’ scheme have played a crucial role in addressing this challenge, helping to drive homeownership—particularly among younger buyers. Since its launch in 2013, the Help to Buy Equity Loan Scheme alone has supported nearly 400,000 buyers in purchasing new-build homes, with over 300,000 of them being first-time buyers during its first stage, 2013 to 2021. The scheme not only made homeownership more accessible but also boosted confidence among developers, leading to greater investment in new housing supply. Additionally, it generated a net return of £718 million for the Exchequer. Despite its success, the scheme officially came to an end in 2023.

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Proposed Scheme

With no replacement scheme introduced since its closure, the Home Builders Federation (HBF) is urging the government to consider new support measures for first-time buyers. One proposed model would require buyers to provide a 5% deposit, matched by a 15% equity loan from the government. Developers would also contribute through a fee equivalent to 1% of the sale price, helping fund the initiative while allowing the government to retain the full equity share.

Will mortgage rates come down?

The trajectory of interest rates will ultimately depend on a range of factors, with inflation remaining a key influence.

However, the Bank of England’s Monetary Policy Committee made a widely anticipated move in May 2025, reducing the base interest rate from 4.5% to 4.25%. Looking ahead, further rate cuts are broadly expected throughout the remainder of the year and markets are currently forecasting three additional cuts in 2025, with the base rate projected to fall to 3.5% by year-end.

What does Neil Jefferson, HBF CEO, have to say?

HBF CEO Neil Jefferson 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 homeownership.

Supporting buyers would not only provide a new generation with the benefits homeownership brings, but it would also directly lead to an increase in home building, creating jobs and boosting economies across the country.”

Click here to view the full Broken Ladder: Stairway to Never report.

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