Hardest stretch for first-time buyers since the crash – and ministers are being urged to act

Getting on the housing ladder has never been easy, but according to the departing chief executive of Britain's largest housebuilder, young buyers are now facing the toughest conditions since the financial crisis. David Thomas of Barratt Redrow has warned that a combination of rising interest rates, growing student debt and squeezed wages is making home ownership "very, very difficult" for a generation of aspiring buyers, with London and the south-east feeling the strain most acutely.

Thomas drew a direct comparison with the aftermath of the 2008-09 crash, telling the BBC that while that period was driven largely by a collapse in lending, the current environment is "very, very comparable" from the buyer's perspective. The difference this time is that the barriers are not just about mortgage availability. Student loan repayments, he explained, reduce the earnings a bank will assess for mortgage purposes, shrinking the pool of people who can afford to buy at all. The result, he argued, is a rising average age for first-time buyers and a drift towards what he called generational inequalities.

The housebuilder is now calling on the government to introduce a support package aimed squarely at first-time buyers, and says the industry is willing to help fund it. Thomas framed the stakes in national terms: if young people are locked out of ownership and rent permanently, the country loses the wider benefits that come with building homes and spreading ownership. It is a notable intervention, coming from a sector that would benefit commercially from any such scheme, and it puts pressure on policymakers to respond.

The numbers back up the sense of a market under strain. Zoopla figures show there are 6% fewer first-time buyers in the market than a year ago. Yet those who remain are not settling for less – quite the opposite. Buyers are targeting homes worth £10,000 more than last year, with an average price of £254,750, up 4.3%. That is nearly three times the wider UK house price growth rate of 1.5%, which lifted the average home to £271,900.

Zoopla attributes this apparent paradox to changes in mortgage affordability testing, which have made more expensive homes accessible to buyers who might previously have been ruled out. In London, the average first-time buyer property has crossed the £500,000 threshold for the first time, reaching £502,250 – a rise of £15,000 in twelve months, even as overall average prices in the capital have not risen. Outside the capital, more than half of first-time buyer inquiries, 53%, are for three-bed houses, suggesting buyers are holding out for family-sized space rather than compromise.

For renters, the message is sobering: if ownership keeps drifting out of reach, more people face long-term renting, which is precisely the outcome Thomas warns against. For landlords, a smaller pool of first-time buyers could mean tenants staying put for longer. For buyers themselves, the picture is mixed – affordability testing has widened what is technically accessible, but higher rates, student debt and the squeeze on wages remain formidable obstacles.

The real question is whether the government will act. With the industry offering to contribute to a first-time buyer package and the data showing demand thinning at the entry level, there is now a clear case on the table. Whether ministers respond, and how any support is designed so it helps buyers rather than simply inflating prices, will shape the housing prospects of an entire generation.