If you’re in your twenties and trying to buy a home in the UK right now, the numbers probably feel like they’re working against you. The average first-time buyer in England needs a deposit worth roughly 80% of their annual household income. In London, that figure climbs past 130%. Meanwhile, private rents rose by about 9% in the year to March 2025, according to the ONS. That squeeze — high rents eating into savings while house prices stay stubborn — is the core of what people call the housing crisis. But the crisis isn’t one single problem. It’s a tangle of low supply, an ageing housing stock, a planning system that lost thousands of staff, and a generation whose earnings haven’t kept pace with property values. Here’s what you actually need to know.
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This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
What these figures don’t show is how they connect. A 9% rent rise means less money for a deposit. A 29% fall-through rate means wasted survey fees and solicitor costs. And the 1.5 million home target only works if the planning system can actually process the applications. Right now, it can’t — not at the speed needed. So the question isn’t just whether enough homes get built. It’s whether the ones that exist are affordable, in the right places, and built to a standard that doesn’t create new problems down the line.
Here’s what you actually need to know.
One term you’ll hear a lot in this conversation is Social Rent.
What I tend to notice is that people lump all “affordable housing” together, but Social Rent is a different beast from Affordable Rent (which can be up to 80% of market rate). That distinction matters when you’re looking at what the government’s new building programme actually delivers.
What the £39 billion social housing plan actually means
In July 2025, the government confirmed the headline numbers for a new 10-year programme called the Social and Affordable Homes Programme (SAHP). The total budget is £39 billion, and it aims to deliver around 300,000 social and affordable homes over its lifetime. At least 60% of those must be for Social Rent — the deepest level of discount.
Bidding for the first wave of funding opens in February 2026. That means the earliest spades in the ground are still a couple of years away. For someone in their twenties now, these homes won’t be ready until their early thirties at best.
There’s also a quiet but important change to how social rents are calculated. From April 2027, landlords can increase rents on properties that are below the formula rent by an extra £1 per week above the usual CPI+1% cap. In April 2028, that rises to £2 per week until the formula rent is reached. For tenants, that means gradual increases over several years — not a sudden jump, but a steady climb.
Around two-thirds of households in the social rented sector already receive Housing Benefit or Universal Credit housing element, so these increases will largely be covered by the benefits system. But for the third who don’t, the extra £2 a week adds up to over £100 a year.
The real cost of Britain’s ageing housing stock
About 20 million of Britain’s 28 million homes were built before 1980. That means most of the housing stock predates modern insulation standards, double glazing, and energy efficiency requirements. The result is higher heating bills, more damp, and lower EPC ratings — all of which hit younger buyers hardest because they’re buying at the lower end of the market where older properties are concentrated.
There’s a less obvious cost too. Asbestos was banned in UK construction in 1999, but it remains present in a significant proportion of homes built before that date. An estimated 1.5 million commercial and public buildings still contain it, and domestic properties built before 1999 are also affected. If you’re buying an older property and planning renovations, an asbestos survey isn’t optional — it’s a safety and legal requirement. Companies like Asbestos Compliance Solutions provide surveys and management plans, but the cost of removal can run into thousands.
What this means in practice: the purchase price of a Victorian terrace might look affordable, but the total cost after a new boiler, insulation, windows, and potential asbestos work can push it well beyond a newer build. That’s the hidden gap that doesn’t show up on Rightmove.
Where the system breaks for buyers and renters
The planning staff shortage that slows everything
England’s planning departments lost roughly 15,000 staff between 2010 and 2023, according to the Local Government Association. Fewer planners means slower decisions on applications, which means developers hold land longer and build later. Even when planning permission is granted, it doesn’t always turn into a completed home — some large housebuilders hold substantial land banks and delay construction to control supply and keep prices up. For a first-time buyer, that delay means the homes that were approved two years ago still aren’t on the market.
The fall-through trap
Barclays data shows 29% of property transactions fall through. For a buyer, that means losing money on surveys (£300–£1,500), solicitor fees (often non-refundable after a certain point), and mortgage application costs. For a seller, it means going back to market and potentially accepting a lower offer. The average chain length in England is around three transactions, so one fall-through can collapse four or five sales at once. What I’d do here is ask your solicitor about “lock-out” agreements or exchange early if both sides are committed — it’s not common, but it can reduce risk.
Right to Buy’s long shadow
Between 1980 and 2020, Right to Buy sold off over two million council homes. Replacement build rates never matched disposal rates. That means the stock of genuinely affordable rented homes is far smaller than it was forty years ago, pushing more people into the private rental market where rents rose 9% in the last year alone. For a 25-year-old today, the chance of getting a council house is a fraction of what it was for their parents’ generation.
The affordability ceiling in cities
In Manchester, Bristol, and Leeds, many tenants pay upwards of 40% of net income on housing costs. That leaves less for saving, which pushes the deposit goal further away. Barclays data shows 16% of Gen Z renters are actively searching to buy — up from 9% in April — but 37% still say deposits are their biggest barrier. The maths doesn’t work if rent eats half your pay.
What a realistic path to homeownership looks like now
Moving further than you planned
Barclays found that 21% of Gen Z buyers are willing to move more than 25 miles to secure a home. That’s a significant shift from the “location first” mindset of previous generations. For someone working in London, moving 25 miles could mean towns like Luton, Reading, or Basildon — places where house prices are lower but commuting costs and time are higher. The trade-off is real: lower mortgage vs higher transport costs and less time at home. A commuting cost calculator can help you run the numbers before you commit.
Shared ownership and other schemes
Shared ownership lets you buy a share of a property (typically 25–75%) and pay rent on the rest. It lowers the deposit needed, but you still pay service charges and the rent on the unsold share can increase. The key question is whether you can afford to “staircase” — buy more shares later — because if you can’t, you’re stuck paying rent indefinitely on a home you partly own. Check the lease terms carefully before signing.
The remortgage reality
Remortgaging accounted for 40.6% of completions in May 2026, up from 30.7% a year earlier. That tells you existing homeowners are refinancing rather than moving, partly because moving costs (stamp duty, legal fees, estate agent fees) are high and partly because mortgage rates are still elevated. For a first-time buyer, this means less competition for smaller homes — but also fewer “starter homes” coming onto the market because existing owners are staying put.
What’s coming next: tenure reform and land value tax
Economists at the Resolution Foundation argue that tenure reform — not just building more homes — must be central to the policy response. One idea gaining traction is land value taxation, which taxes the unimproved value of land rather than the buildings on it. The goal is to discourage land banking and encourage development on underused plots. Advocates include figures at the Treasury and academics at the London School of Economics and Cambridge. It’s not law yet, but it’s being discussed seriously. If it comes in, it could change the economics of holding land for developers and potentially free up more sites for housing.
Frequently asked questions
Can I still buy a home if I have student debt? ▾
What’s the difference between Social Rent and Affordable Rent? ▾
How long does it take to get planning permission for a new home? ▾
Is shared ownership a good deal for first-time buyers? ▾
What happens if my property chain collapses? ▾
Will land value tax make homes cheaper? ▾
The one shift that could change the most
Housing spending in the UK has fallen from over 6% of government expenditure in the late 1970s to around 1–2% today. Over the same period, health spending rose from 9.4% to roughly 18%. Professor Marmot’s 2010 review identified housing as a social determinant of health — meaning poor housing doesn’t just cost tenants, it costs the NHS too. If the government’s 1.5 million home target is met, and if the SAHP delivers its 300,000 social and affordable homes, the direction changes. But those are big “ifs” that depend on planning reform, construction capacity, and sustained political will. For now, the most realistic path for a Gen Z buyer involves compromise on location, a clear-eyed look at total costs beyond the asking price, and a willingness to use schemes like shared ownership — while keeping an eye on the policy changes that could reshape the market in the next five years.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read The Rise of Co-Living: Is It a Solution to the UK Housing Crisis?.
Sources and Further Reading
Micro-Living in the UK: Fad or the Future of Urban Housing? — Explores another emerging tenure option for younger buyers in expensive cities.
Why Government Regulations Are Reshaping UK Buy-to-Let Investing — Looks at how policy changes affect the rental market that most Gen Z tenants rely on.
Gov.uk (2025). Delivering a Decade of Renewal for Social and Affordable Housing. 🔗
Campbell Watson (2026). UK Housing Crisis 2026: Why Building More Homes Is Only Half the Answer. 🔗
Barclays (2026). May 2026 Property Trends. 🔗
The Big Issue (2026). The Housing Crisis Is Going Nowhere. 2026 Must Offer a Better Vision for the Future. 🔗
