Challenges in the housing market

There are significant obstacles for buyers. House-building targets appear increasingly difficult to meet, with demand for housing continuing to exceed supply, putting upward pressure on prices. Consequently, first-time buyers (FTBs) are getting older, with the average age now reaching 37, according to Moneysupermarket.

For those hopeful homeowners living in rented accommodation, the same dynamics of demand exceeding supply are driving up rents, making it harder to save for a deposit. The recent Zoopla Rental Market Report says there are now 12 renters chasing every rental property and UK rents are expected to rise by 3% - 5% in 2025.

Landlords are grappling with increasing cost and regulation, with some choosing to sell properties rather than expand their portfolio. This restriction in supply is putting further upward pressure on rental prices, although it may provide opportunity for some buyers, particularly those living in a rental property that is being sold by the landlord.

Affordable Homeownership Schemes

Following the end of Help to Buy, there remain several government-backed schemes that continue offer a pathway for hopeful buyers. Encouragingly these are being supported by a growing number of lenders. These include:

Shared Ownership

Shared Ownership allows buyers to purchase between 25% and 75% of a home, while paying rent on the remaining share.

As mortgage rates have climbed, Shared Ownership has become even more relevant – with the rent payable sometimes offering lower monthly outgoings compared to mortgage costs.

Right to Buy

Right to Buy enables eligible council tenants of at least three years to purchase their homes at a discounted rate.

First Homes

The First Homes scheme provides eligible first-time buyers with at least a 30% - 50% discount on new-build properties.

Affordability is key

Whether or not purchasers are using a scheme like these, affordability will remain key for buyers. Different lenders have approach calculating mortgage affordability in their own way, particularly when it comes to considering variable income such as bonus, overtime or self-employment, or income from second jobs. A growing number of non-high street lenders, like Pepper Money, are meeting customer needs in this space, underwriting every application on its own individual merits, helping customers to adapt to the challenging market and maximise their affordability potential.

The good news is that a more lenders, are supporting affordable homeownership schemes, providing new opportunities for hopeful homeowners to fulfil their ambitions of owning a home.

We are delighted to attend the conference as collectively we need to do more to help hopeful homeowners. Especially when you consider our study found nearly seven in 10 (69%) people who don’t currently own their own home say that they would like to in the future. The conference provides a forum to discuss, explore and identify how we can help more customers fulfil their homeownership ambitions.