Home ownership in England

Approximate read time: 25 minutes

The House of Lords is scheduled to debate the following motion on 10 September 2026:

Baroness Eaton (Conservative) to move that this House takes note of homeowners and levels of home ownership.

As housing is a devolved matter, this briefing focuses on England.

1. Key points

• 65% of households in England owned their own home in 2024/25. This was similar to a decade ago but below the peak of 71% in 2003. While there has been a modest recovery since the decline following the 2008 financial crisis, overall ownership rates have been relatively flat in recent years.
• The average age of a first-time buyer has continued to rise, increasing from 31 in 2003/04 to 34 in 2024/25. First-time buyer activity increased in 2025.
• Housing affordability has worsened substantially over the past 25 years. The average house price in England was 7.63 times earnings in 2025, compared with approximately four times average earnings in 2000.
• Affordability varies significantly by region. An average-priced home in the North East costs around five times average earnings, while in London the equivalent ratio is 10.6.
• There is debate about the causes of rising house prices. Explanations include foreign investment, historically low mortgage interest rates enabling people to pay more, and constraints on housing supply, particularly in high-demand locations.
• Saving for a deposit can be a significant barrier to home ownership. Many people draw on parental support, raising concerns about inequality.
• Mortgage affordability checks can also restrict access to home ownership, particularly when interest rates are high. However, recent regulatory and lender changes have increased borrowing capacity for some prospective buyers.
• The Starmer government said it would deliver 1.5mn homes during the current parliament, supported by planning reforms and investment in affordable housing. Before he became prime minister, Andy Burnham said he wanted to significantly increase the number of council houses being built.
• Progress towards increasing housing supply remains challenging. Around 199,500 net additional homes were delivered in England in 2025/26, below the annual level required to meet the government’s overall target. However, housing starts have recently increased.
• Affordable housing delivery has been increasing, but some query whether many of these homes are genuinely affordable for lower-income households.
• Governments have also used demand-side measures to support first-time buyers. Evidence on the effectiveness and distribution of benefits from these policies remains mixed.

2. Statistics and trends

2.1 Home ownership

In 2024/25, 65% of households in England owned their own home, either with or without a mortgage.^[1] This is similar to the rate 10 years ago, when 64% of households were owner occupiers.^[2]

Looking at the longer-term trend, owner occupation increased gradually from the 1980s to 2003, when it reached a peak of 71%.^[3] A period of decline in home ownership followed, reaching 63% in 2013/14. It has since seen a small increase, to 65%.

Figure 1. Percentage of households that own their own home, England, 1999 to 2024/25

The average age of first-time buyers in England rose from 31.4 in 2003/04 to 33.9 in 2024/25.^[4]

Recent statistics show an increase in first-time buyers in 2025. According to the Nationwide building society, first-time buyer activity in 2025 was 20% higher than in 2024.^[5]

2.2 House prices and affordability

House prices are currently significantly higher in relation to average earnings than they were in 1999. However, this trend has reversed in recent years, leading to an increase in affordability since 2021.

The average house price in England was £71,000 in 1999, 3.96 times average earnings.^[6] The ratio of prices to earnings then increased over the next couple of decades, peaking in 2021 when the average house price in England was £285,000, 9.06 times average earnings. The ratio has since declined to 7.63 in 2025; this is because earnings have been rising faster than house prices in recent years.

However, the current prices to earnings ratio of 7.63 is still significantly higher than the five times average earnings affordability benchmark used by the Office for National Statistics (ONS). The last time the ratio was below five was in 2001.

Figure 2. Ratio of average house prices to average earnings, England, 1999 to 2025

There is significant regional variation in affordability in England. In the North East, an average-priced home is five times average earnings and therefore qualifies as ‘affordable’ on the ONS measure.^[7] In London the ratio is 10.6; this means that for someone with average earnings a further £279,000 would be required to buy an averaged-priced home in London, in addition to the five times earnings that would be provided by a standard mortgage.

A 2025 survey by the Building Societies Association found that 59% of renters between the ages of 25 and 44 in the UK expected to have already bought a home but had not been able to do so.^[8] Approximately one-third of 25- to 44-year-olds in the survey thought they would be able to buy a home within the next year; a similar number wanted to buy their own home but thought they would never be able to do so.

Similarly, a survey by Ipsos conducted in November to December 2024 found that 76% of renters in Great Britain would like to own their own home but 60% believed they would never be able to afford one.^[9]

2.3 Commentary on the rise in house prices

There is debate about why house prices in England rose so much faster than earnings in the past 20 to 30 years. Some have argued that foreign investors buying UK properties are a significant factor; for example, in 2018 Dr Filipa Sa of King’s College London published research arguing that “with no foreign investment in the housing market in England and Wales between the years 2000–2014, house prices would be 19% lower than they are now [in 2018]”.^[10]

Others highlight the relatively cheap credit that was available for much of the period of rising house prices, as people could afford bigger mortgages. The economist Ian Mulheirn has argued that the decline in mortgage interest rates since the late 1990s can account for a large proportion of the rise in UK house prices in that time, while agreeing that foreign investment likely explains a large part of the above-average increases seen in London.^[11] Similarly, in 2019 David Miles and Victoria Monro of the Bank of England argued “the rise in house prices relative to incomes between 1985 and 2018 can be more than accounted for by the substantial decline in the real risk‑free interest rate observed over the period”.^[12]

A third perspective concentrates on housing supply, arguing that the price increases have been driven by demand outstripping supply in areas of high demand. Economists from the London School of Economics Christian Hilber and Andreas Mense argue that “structural obstacles to building—not temporary financial conditions—are at the heart of the UK’s long-term affordability challenge”, citing evidence that house prices grew the most in the areas with the most tightly constrained supply.^[13] The thinktank Centre for Cities has also argued that lack of supply was the most important factor behind rising prices in the most expensive cities.^[14]

3. Barriers to home ownership

3.1 Deposit

A recent House of Commons Housing, Communities and Local Government (HCLG) Committee inquiry into the affordability of home ownership found that accumulating the required deposit “was one of the biggest hurdles, if not the biggest, to getting a mortgage”.^[15] The mean deposit of a first-time buyer in 2024/25 was £78,131 and the median was £36,500.^[16] (The mean deposit is significantly higher than the median because it is raised by a small number of very high deposits.)

When asked how they funded their deposit, most first-time buyers (86%) said they used savings, though this was not always the exclusive source of funds. 31% reported receiving help from family or friends (either exclusively or in addition to other sources) and 6% used an inheritance as a source of deposit. In its inquiry, the House of Commons HCLG Committee found that parental support had become an important part of the current housing market for first-time buyers. It argued this “entrenches inequality in the sector” and that now “a young person’s chance of homeownership depends more on parental home ownership than on personal earnings”.^[17]

One of the factors making it hard to save enough for a deposit is high rents.^[18] On average, private renters spent 34% of household income on rent in 2024/25.^[19] In 2008/09 it was 29%.^[20] In contrast, those with mortgages spent 19% of household income on mortgage payments on average in 2024/25.

The proportion of the house price required as a deposit to secure a mortgage (known as the loan-to-value ratio, or LTV) influences the size of deposit required and is another factor affecting how feasible it is to accumulate a deposit. Historically, the availability of high LTV mortgages has underpinned higher levels of first-time buyer numbers and a major cause of the significant decline in home ownership after the 2008 global financial crisis was lenders no longer offering these high LTV mortgages.^[21] Recent years have seen a renewed increase in high LTV mortgages, which may enable more people to buy homes.^[22] However, high LTV mortgages also leave people more at risk of default if interest rates rise, and of being in negative equity if house prices fall.

3.2 Mortgage affordability checks

Another barrier to home ownership can be mortgage affordability checks, especially in the context of high interest rates since 2022.^[23] These checks assess a mortgage applicant’s ability to make mortgage repayments in light of their other financial commitments, including their ability to handle an increase in interest rates. The House of Commons HCLG Committee heard that “just 17% of people” have a high enough income “to meet lenders’ affordability rules at prevailing prices and interest rates”. The committee said that some private renters can fail affordability assessments even if their monthly rental payments are higher than their mortgage repayments would be.

However, recently lenders have become more flexible in conducting their affordability tests, leading to buyers being able to borrow more since 2025.^[24] In March 2025, the Financial Conduct Authority “reminded” firms about existing flexibility in interest rate stress tests, leading many lenders to widen borrowing options, increasing offers by around £30,000 for many borrowers.^[25]

There has also been an increase in mortgage availability recently due to a change in the rules around the maximum amount that can be offered. In 2014, the Bank of England (BoE) imposed a limit on the number of loans that could be offered at a rate of more than 4.5 times the borrower’s income, stating these could not exceed 15% of new mortgages for each lender.^[26] In July 2025 the BoE introduced a temporary exemption to this rule, saying individual lenders could exceed the 15% limit as long as the industry as a whole did not.^[27] The BoE is currently consulting on making this change permanent.^[28] Nationwide has stated that making the exemption permanent would allow it to lend an additional 10,000 first-time buyer mortgages and around £2.5bn of additional lending per year.^[29]

4. Housebuilding

There is debate about the extent to which house prices can be reduced through housebuilding. However, there is general consensus that more homes are needed, particularly in areas of high demand. In its 2024 general election manifesto, the Labour Party said it would deliver 1.5mn new homes over the current parliament.^[30]

4.1 Not enough houses in areas of high demand

Between the mid-1990s and 2021, housebuilding kept pace with the growth of the adult population overall: the adult population in England grew by 20% between 1996 and 2021 and the total number of properties grew by 21%.^[31] However, many of these new properties were not built in the areas where demand was highest, particularly London.

Some argue that planning restrictions are the main reason for this. In 2024 Paul Johnson, then director of the Institute for Fiscal Studies, stated that across the country there is “no correlation between house prices—the fundamental indication of demand—and housebuilding, the obvious supply response”. He said this was evidence the planning system has restricted housebuilding, as housebuilders cannot respond to high demand by increasing supply.^[32]

It has also been argued that housing developers have not built homes as quickly as they could because to do so would reduce prices. In a 2024 report, the Competition and Markets Authority found that:

[…] housebuilders’ incentives lead them collectively to build fewer homes than the socially optimal amount and to build them at a rate that is consistent with the local absorption rates—the rate at which homes can be sold without housebuilders needing to reduce their prices—rather than as quickly as possible.^[33]

Developers have disagreed with this analysis. Graham Prothero, chief executive at MJ Gleeson, told the Financial Times that “homebuilders are very keen to build at pace” but getting planning permission was a major obstacle. He said in spite of the government’s recent planning reforms it was still “a tortuous process, constrained by lack of resourcing in local planning departments”.^[34]

4.2 Decline in housebuilders’ profitability since 2022

Since 2022, housebuilders have seen a significant rise in costs and decline in profitability. As a result, the number of new homes built per year and the dwelling stock per 1,000 adults have declined every year since 2022.^[35] Research by the property website Zoopla found that between 2022 and 2025 homebuilding costs increased by 17% but prices increased by only 1%.^[36] The Home Builders Federation has provided a breakdown of the additional costs since 2020:

 […] the additional cost to build a home since 2020 is about £76,000 per home. Of this, the largest increase is £37,000 of material and labour cost inflation, followed by £23,000 of regulatory costs (of which £10,200 relates to the future homes standard) and £7,000 of taxes and levies (including £2,320 from the building safety levy).^[37]

In correspondence with the House of Commons HCLG Committee, some of the biggest housing developers reported significant declines in profit margins in recent years:

Barratt Redrow said that their operating margins had fallen from around 17% in 2021 to 5.1% in 2025; Taylor Wimpey’s operating margins fell from 19.3% in 2021 to 11.5% in 2024 (and around 11% in 2025). Bellway has an operating margin of 10.9% in the 2025 financial year, which is below the 18.5% margin from 2022 (its year of peak volume output) and its highest margin of 22.3% from 2017.^[38]

UK-listed housebuilders have issued eight profit warnings during the first half of 2026, the highest first-half total since the start of the pandemic.^[39]

5. Policy

5.1 Starmer government initiatives

The Starmer government committed to a number of reforms to enable more housebuilding. These included:^[40]

• reintroducing mandatory housing targets for councils
• supporting social and affordable housing provision
• strengthening a “brownfield-first” approach to development
• “modernisation” of the green belt system, including allowing release of grey-belt land
• addressing barriers to large developments through the ‘New homes accelerator’
• changes to the planning system in the Planning and Infrastructure Act 2025
• establishing the New Towns Taskforce

It also provided increased funding for planning officers.^[41]

In December 2025 the Starmer government consulted on further changes to the ‘National planning policy framework’ (NPPF), which sets out the government’s planning policies for England. The government said these proposals would constitute an “overhaul” of the NPPF.^[42] The proposals would introduce national decision-making policies alongside plan-making policies, with a shift in emphasis from discretionary decision-making guided by the NPPF to a rules-based approach. It would also change the “presumption in favour of sustainable development” to be “a permanent presumption in favour of suitably located development”, alongside other measures.^[43] The government has not yet published the result of the consultation.

In 2025/26, an estimated 199,500 net additional homes were delivered in England.^[44] This is considerably below the average of 300,000 per year that would be needed to meet the government’s target of 1.5mn across this parliament.^[45] However, numbers of new homes started in the first quarter of 2026 were up on the equivalent quarter of 2025: new build dwelling starts in England were estimated to be 33,960 (seasonally adjusted) in the first quarter of 2026, an 18% increase when compared to the first quarter of 2025.^[46]

In evidence to the House of Commons HCLG Committee in July 2025 the minister for housing and planning, Matthew Pennycook, said the government expected house completions to be low in the first few years of the parliament but that they would increase significantly in the second half.^[47] The committee said the government should set annual targets to allow the committee and others to scrutinise its progress towards its overall goal of 1.5mn new homes. The government has not yet responded to the committee’s report.^[48]

5.2 Affordable housing

Affordable housing is defined in the NPPF as “housing for sale or rent, for those whose needs are not met by the market” and falls into one of the following categories:^[49]

• social rent
• other affordable housing for rent, for which the rent is at least 20% below local market rents
• discounted market sales housing, sold for at least 20% less than local market value
• other affordable routes to home ownership, such as shared ownership and rent to buy

Most affordable homes are for rent and a smaller proportion are available to buy; of all affordable homes completed in 2024/25, two-thirds were for rent and one-third for purchase.^[50] This mix has been changing, however, with the proportion for rent declining in recent years: in 2017/18 three-quarters were for rent and one-quarter were for purchase.

The total number of affordable homes completed has risen every year since 2017/18 (with the exception of 2020/21), rising from 47,388 in 2017/18 to 64,921 in 2024/25.

Some dispute whether any of the categories except social rent, which is defined in relation to local income as opposed to market value, are truly affordable. The House of Commons HCLG Committee concluded that “other forms of so-called affordable housing are not truly affordable for many people”.^[51]

The vast majority (94% in 2024/25) of affordable homes to buy are made available under shared ownership.^[52] This allows buyers to purchase part of the property and pay rent on the other part. They later have the option of buying more of the property. While shared ownership has been successful at enabling many people to buy property who would otherwise not be able to, it has been criticised for high costs of rent and maintenance after purchase.^[53]

In order to increase the number of social and affordable homes, the Starmer government announced five new policies:^[54]

• £39bn over 10 years (2026 to 2036) for the social and affordable homes programme, aiming to deliver around 300,000 social and affordable homes
• addressing financial challenges for housing associations and councils through a long-term rent settlement, giving social landlords access to government remediation funding schemes and making low-interest loans available
• establishing an “effective and stable” regulatory regime
• “reinvigorating” council housebuilding through changes to ‘Right to buy’, a discounted loan rate, housing revenue account reforms, and skill- and capacity-sharing programmes
• working in partnership with the social and affordable housing sector

In his first speech after being re-elected to Parliament in June 2026, Andy Burnham said a government led by him would “oversee the biggest council house building programme since the post-war period”.^[55] However, commentators have questioned the viability of this ambition as many councils do not own any housing stock themselves and have not directly built any houses for many years, with most social and affordable housing built by housing associations and other social landlords.^[56]

5.3 Demand-side interventions

While housebuilding addresses supply, governments have also intervened to increase demand by helping people with the costs of buying a home.

5.3.1 Mortgage guarantees

As discussed above, wide availability of high LTV mortgages has historically been associated with higher rates of home ownership. In 2025 the Starmer government introduced a permanent mortgage guarantee scheme, replacing a temporary scheme which had expired.^[57] The purpose of the scheme is to ensure good availability of 91–95% LTV mortgages. It does this by providing lenders with a government-backed guarantee that partially insures them against losses on these loans.

In its inquiry, the House of Commons Housing, Communities and Local Government Committee heard that many lenders were offering high LTV mortgages without the scheme.^[58] It concluded the scheme was “having a negligible effect on the availability of high loan to value (LTV) mortgages in the current market and on the affordability of home ownership”. However, the government told the committee the purpose of the scheme was to ensure lenders continued to offer high LTV mortgages in the event of an economic downturn.

5.3.2 Lifetime ISA and replacement

The government also supports people to buy their first home through the Lifetime ISA (LISA). This is a form of tax-free investment or savings account that can be used towards the purchase of a first home or in retirement.^[59] The government adds the equivalent of 25% of whatever the account holder contributes, up to £1,000 per year, paid annually. The money can only be used to purchase a house up to £450,000 and withdrawals that are made not for a first home or retirement incur a withdrawal charge of 25%.^[60]

The £450,000 house price cap has not increased since the LISA was launched in 2017, though average house prices have risen 30% in that time.^[61] Many have argued that the limit is too low, especially for those buying with a partner or in London.^[62] Some people have not been able to use their LISA savings towards a home because of house-price growth since they started saving. However, the government has responded that the cap is still significantly above the average first-time buyer price of £240,000.^[63] In a 2025 inquiry into the LISA, the House of Commons Treasury Committee concluded that the cap “ensures that government spending supports those who need financial assistance the most”.^[64]

The penalties for withdrawing money not for a first home or retirement have also been criticised. The number of unauthorised withdrawals has increased year on year, reaching 8% of all accounts opened in 2024/25.^[65] More LISA holders have lost a part of their original savings than have used it to purchase a house. In addition, provider data shows that thousands of individuals are making multiple unauthorised withdrawals. Those who made an unauthorised withdrawal often cited financial difficulties, such as needing to rely on savings due to unemployment or needing to pay off debts.

In June 2026 the Starmer government launched a consultation on a replacement for the LISA. Highlighting problems arising from the dual purpose of the LISA, the government said the new product would be for first-time buyers only. The government bonus will only be given when the savings are withdrawn to buy a house, eliminating the need for a withdrawal charge. The consultation said eligible house prices would be capped, but did not say at what level or if this would increase regularly.

5.3.3 ‘Help to buy’ equity loan

In 2013 the coalition government launched the ‘Help to buy’ equity loan scheme.^[66] Under the scheme, buyers purchasing a new-build property could borrow up to 20% (40% in London) of the value of the home from the government, in addition to a mortgage. The loan was interest-free for the first five years.^[67] The scheme was restricted to first-time buyers in 2021 and ended in 2023.^[68]

Analysis of the ‘Help to buy’ equity loan by the Institute for Fiscal Studies concluded that “the affordability gains from the equity loan schemes were concentrated among higher-income individuals”.^[69] It said that most beneficiaries could have saved for a deposit relatively quickly without the scheme, so the main impact was enabling them to buy a house a few years earlier than they otherwise would have.

Similarly, a review of the scheme by the National Audit Office (conducted in 2019, while the scheme was still active) found that around 60% of users could have bought a home without the scheme’s help.^[70] However, the National Audit Office also concluded that the scheme had increased both home ownership and housing supply.^[71] The Home Builders Federation has argued that the scheme enabled more houses to be built.^[72]

A 2025 report by the Home Builders Federation found that by 2024/25 the government had made £1.38bn profit from the ‘Help to buy’ scheme.^[73]

6. Read more

All books listed are available for members of the House of Lords to borrow from the House of Lords Library.

• Tony Blair Institute for Global Change, ‘Home ownership and the UK mortgage market: An international review’, 11 April 2022; and Gabija Zemaityte, ‘Long-term fixed-rate mortgages through an international lens: Could they lead to higher home ownership?’, Bank Underground, 9 October 2024

These papers examine the evidence from other countries on long-term fixed-rate mortgages and discuss whether they could increase home ownership in the UK.

• Brian Lund, ‘Housing in the United Kingdom: Whose Crisis?’, 2019

This book explores the impact of the UK housing market on different groups, looking at age, ethnicity, gender, class and location. It also provides an overview of the history of the housing market and analysis of proposed interventions.

• Josh Ryan-Collins, ‘Rethinking the Economics of Land and Housing’, 2017

This book discusses the link between land economics and housing crises, financial instability and inequality.

• Institute for Fiscal Studies, ‘The determinants of local housing supply in England’, 4 February 2025

This detailed analysis of English local housing data finds that housing supply elasticity (how much it changes in response to demand) is low compared to other countries. It examines the factors that affect elasticity and the impact of housing supply constraints on the workforce and productivity.

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Image by Ben Elliott on Unsplash.