Leeds Building Society boss warns Government over 'lost generation of first-time buyers'

The chief executive of Leeds Building Society has warned a “lost generation of first-time buyers” could be created unless the Government takes more action to make property purchases more affordable.
By Chris Burn
Published 27th Nov 2023, 10:06 BST

Richard Fearon said LBS hopes to see political action in three key areas to help the issue – changes to planning laws including a return to mandatory housing targets to encourage the building of more properties; increasing affordable routes to home ownership​, with renters’ reform to provide greater protection for those saving for a deposit and changes to Lifetime ISA scheme to support people with saving deposits.

Earlier this year LBS revealed that 426,000 fewer first-time buyers would be able to buy their first home over the next five years compared to the past 40-year average if economic projections play out.

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Comparing newly published OBR data with its forecasts from March 2023 suggests that conditions are becoming tougher, with even more potential homeowners set to join this group of lost first-time buyers, reinforcing the need for reform of the housing market.

Richard Fearon, chief executive of the Leeds Building Society, Sovereign Street, Leeds, West Yorkshire. Picture By Yorkshire Post Photographer, James Hardisty.Richard Fearon, chief executive of the Leeds Building Society, Sovereign Street, Leeds, West Yorkshire. Picture By Yorkshire Post Photographer, James Hardisty.
Richard Fearon, chief executive of the Leeds Building Society, Sovereign Street, Leeds, West Yorkshire. Picture By Yorkshire Post Photographer, James Hardisty.

Mr Fearon said: “The greatest influence on affordability for first-time buyers is the toxic combination of rising deposit requirements and mortgage interest rate increases over the last 18 months.

“We recently highlighted that 426,000 people – or 233 per day - will be unable to buy their first home over the next five years if the economic projections became reality. Sadly, the new OBR forecasts reveal homeownership will remain a dream for an even higher number of people.

“It’s no surprise that home ownership has fallen by a third among young people, and that housing transactions are set to fall by 6.9 per cent over the next year, when the hurdles to achieve homeownership are so high.”

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“We’re taking steps ourselves to support aspiring homeowners, and we welcome the support brought forward to help the housing sector plus the extension of the mortgage guarantee scheme.

“However, every generation deserves a place to call home, and with first-time buyer affordability at its worst point for many decades, the Chancellor needed to go further.

“Without action we risk creating a lost generation of first-time buyers. We believe the government can, and must, do more to support first-time buyers by building more homes of all types, by increasing affordable routes to home ownership, and by helping potential homeowners save for their deposit.”

Related topics:Government