- First-time buyers in London are now targeting homes worth more than £500,000 on average.
- Barratt Redrow says higher student debt repayments are making mortgages harder to secure.
- Property platform Zoopla found there are 6 per cent fewer first-time buyers in the market compared with a year ago.
Young people trying to buy their first home in the UK are facing the toughest market conditions since the financial crisis, according to the head of the country’s biggest housebuilder.
Barratt Redrow chief executive David Thomas said a combination of rising mortgage rates, growing student debt and pressure on wages is making it increasingly difficult for first-time buyers to get on the property ladder.
Thomas reportedly said conditions were now comparable to the years following the 2008 financial crisis, particularly in London and the south-east where affordability pressures remain severe.
His warning comes as fresh data from Zoopla showed the number of first-time buyers searching for homes has fallen by 6 per cent compared with last year, despite property prices continuing to rise.
Student debt and rising prices reshape the market
According to Zoopla, the average first-time buyer is now targeting homes priced at around £254,750, up 4.3 per cent from a year earlier. That increase is almost three times faster than wider UK house price growth, which rose by 1.5 per cent over the same period.
In London, the average price of a home being targeted by first-time buyers has crossed the £500,000 mark for the first time, reaching £502,250.
Thomas reportedly said student loan repayments are becoming a growing obstacle because banks take those deductions into account when assessing mortgage affordability.
He added that the trend was pushing up the average age of first-time buyers and worsening generational inequality in the housing market.
Outside London, Zoopla found that more than half of first-time buyer searches are now focused on three-bedroom homes, suggesting many buyers are still prioritising space despite affordability pressures.
Calls grow for support package
Thomas is now calling for a dedicated government package aimed at supporting first-time buyers, saying housebuilders would be willing to contribute towards such measures.
He reportedly warned that a long-term shift away from home ownership towards permanent renting could have wider consequences for the economy and social mobility.
The housing market has remained under pressure from higher borrowing costs since interest rates climbed sharply over the past two years. While mortgage affordability testing has eased slightly, helping some buyers access larger loans, many younger households are still struggling to save for deposits while managing higher living costs.
Industry figures say the gap between wages and house prices continues to leave large parts of the market out of reach for many first-time buyers, particularly in southern England.
