Here’s a sobering stat: just 30% of Brits believe they’ll afford a home in their lifetime. That’s not pessimism, it’s reality biting hard.
While 76% of over-55s own their homes (and most pensioners own outright), younger generations are staring down a mountain of unaffordable property prices and wage stagnation. The dream of homeownership? For many, it’s slipping further away each year.
Let’s break down why buying a home feels impossible, who’s actually managing it, and what’s really going on with the UK housing market.
The Real Barriers to Homeownership
Deposits Are the Dealbreaker
According to Barclays research, the biggest obstacle isn’t just high house prices, it’s scraping together a deposit. Even with prices cooling slightly, you’re still looking at massive upfront costs that can take years to save.
The numbers tell the story: a typical first-time buyer needs up to a 20% deposit and would spend 36% of their take-home pay on monthly mortgage payments. That’s well above the historical average of 30%, per Nationwide’s Affordability Survey.
House Prices vs. Wages: A Losing Battle
In 1995, the house price to earnings ratio sat at 2.0. Those days are long gone. By 2021, that ratio hit 6.0—meaning homes cost three times more relative to what people earn.
Wages simply haven’t kept pace with property values over the past three decades, turning what was once a reasonable goal into a financial marathon.
Gen Z and Millennials: Optimistic or Delusional?
Younger renters are actually more optimistic than older ones about homeownership.
Nearly half of Gen Z renters (48%) and 41% of Millennials think they’ll buy within five years. Half of Gen Z and 47% of Millennials are actively saving for deposits right now.
But there’s a catch.
The Bank of Mum and Dad Is Working Overtime
40% of Gen Z respondents admitted they’d find it impossible to buy without inheritance or family loans. That’s not a small minority—that’s nearly half relying on generational wealth to get a foothold.
The “bank of mum and dad” handed over £9.4 billion in 2023 alone—almost double what it was five years ago. In 2024, 40% of all deposits came from inheritances or family gifts.
As Mike Ward from Armalytix put it: “Family gifts increasingly determine who can move forward and who remains stretched.” Translation? Your family’s financial situation matters more than your salary when it comes to buying property.
Why This Matters for the UK Economy
This isn’t just about individual dreams deferred. When homeownership becomes a privilege reserved for the wealthy or the well-connected, it creates a two-tier society.
Frances McDonald, director of residential research at Savills, notes that only the highest earners and those with significant family support can access the top end of the market. Everyone else? Stuck renting or settling for less.
Barclays’ Jatin Patel acknowledges “there is more work to be done if we are to create a more dynamic housing market for everyone.” That’s corporate-speak for: the system’s broken and needs fixing.
The Bottom Line
Homeownership in the UK has shifted from a reasonable life goal to a luxury good. With house-to-earnings ratios triple what they were 30 years ago and deposits requiring either years of saving or family help, it’s no wonder only 30% of Brits think they’ll ever own. Until wages catch up or housing supply dramatically increases, expect this generational divide to widen.
Want to improve your chances? Start saving early, explore shared ownership schemes, and don’t rule out less expensive regions outside major cities.
FAQ
Q1 Why is homeownership so unaffordable in the UK?
A: House prices have grown three times faster than wages since 1995, with the price-to-earnings ratio hitting 6.0 by 2021. Deposits now require up to 20% upfront, and monthly payments consume 36% of typical take-home pay—well above historical norms.
Q2 How much did the bank of mum and dad contribute in 2023?
A: Family members gifted or loaned £9.4 billion to help with home purchases in 2023, nearly double the amount from five years earlier. In 2024, 40% of all deposits came from inheritances or family gifts.
Q3 Are younger generations more optimistic about buying homes?
A: Yes, surprisingly. 48% of Gen Z and 41% of Millennial renters believe they’ll own within five years, compared to lower expectations among older renters. However, 40% of Gen Z admits they’d need family help to make it happen.
Q4: What percentage of over-55s own their homes in the UK?
A: 76% of over-55s in England own their homes, with 74% of those aged 65+ owning outright. This stark contrast highlights the generational divide in homeownership rates.
Q5: What’s the biggest barrier to buying a first home?
A: According to Barclays, the cost of a deposit is the number one barrier, followed closely by high overall property prices. These two factors create an often insurmountable financial hurdle for aspiring homeowners.
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Effective Date: 15th July 2025
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