It’s time to back first-time buyers - before they’re locked out for good

But this is no longer enough. The rising cost of property, stagnant wages, and the phasing out of government support mean the goalposts are not just moving, they’re disappearing altogether.

With the Chancellor now confirming that the Budget will take place on 26 November, first-time buyers will be watching closely. This moment matters: it’s a chance to show that the government recognises the mounting pressures facing young people who want to own a home and to deliver practical support where it’s most needed.

A Dying Aspiration

Homeownership is a distant dream for many people right now. The average age of a first-time buyer is now 34, up from 31 two decades ago, and the proportion of households aged 25 to 34 owning their home is now just 39 per cent, down from the peak of almost 60 per cent in 2000.

Why does home ownership matter so much? Well, data shows that someone who owns a home will be £350,000 wealthier over a 30-year period than someone who rents. We also know that, despite the obstacles, the desire to be a first-time buyer remains strong - according to the English Housing Survey, 71 per cent of young renting households expect to buy their own home at some point.

We need some positive changes from the government to help first-time buyers reach this life milestone. The barriers to homeownership are deeply entrenched but not insurmountable.

In the upcoming Budget, the Chancellor has an opportunity to take meaningful action. These measures are essential if we are to avoid locking an entire generation out of homeownership.

Stamp Duty: A Tax Bomb for First-Time Buyers

The stamp duty threshold for first-time buyers, raised during the mini-budget in 2022 to £425,000, is now £300,000. In practical terms, it means that buyers purchasing homes just above this lower threshold will face bills of over £6,000 in stamp duty, on top of crushing deposit and mortgage requirements.

We’re already seeing the negative impact of this change. Buyers were pushed to fast-track purchases to beat the deadline, risking rushed decisions or failed transactions. Others backed out of the market altogether, deterred by the prospect of extra costs they couldn't plan for.

Extending the threshold would give buyers certainty and recognise the new normal of higher property prices, especially in urban areas where most first-time buyers live.

More Affordable Homes

I welcomed the previous government’s £5 billion commitment to increase affordable housing supply. But if it is serious about giving people a fair shot at owning a home, this must be the beginning, not the end, of government intervention.

In some parts of the country, “affordable housing” has become a misnomer, with properties priced far above what most first-time buyers consider affordable. What’s needed is a fresh approach: one that prioritises building genuinely affordable homes, particularly in areas of greatest demand, and ensures that public funding translates into real, accessible options for buyers - not just glossy new builds destined to be snapped up by landlords or international investors.

This is not just a moral imperative, it’s an economic one. A healthy housing market depends on a steady stream of new entrants. First-time buyers are the foundation upon which the entire housing chain rests. Without them, the system becomes stagnant. Demand is pushed higher up the ladder, pushing prices further out of reach.

Don't Touch the Lifetime ISA. It’s Working

Of all the levers the government has to support first-time buyers, the Lifetime ISA (LISA) is one of the most effective and yet, it’s also potentially vulnerable to short-term policy tinkering.

Right now, LISA holders can save up to £4,000 per year, with the government adding a 25% bonus (up to £1,000 annually) to help towards a first home.

It’s tax-efficient, simple to understand, and directly targets the people who need it most: young savers who would otherwise struggle to get on the property ladder.

Any move to water down or scrap the LISA scheme would be a serious mistake. It sends the wrong signal at the wrong time. Instead, the government should double down on LISAs, explore raising the contribution cap or widening eligibility so more people can benefit.

Tembo’s own data shows that the LISA is often the most powerful savings tool available to our customers. It gives them a concrete goal, a meaningful reward for disciplined saving, and a sense of momentum. That’s rare in a housing market that often feels stacked against them.

The Bigger Picture

Fixing the housing crisis isn’t easy, but that shouldn’t be an excuse for inertia. Now is the time for positive action.

By increasing the stamp duty threshold, accelerating the construction of affordable homes, and protecting the Lifetime ISA, the Chancellor can make an immediate difference in the lives of first-time buyers.

This is about creating a fairer, more dynamic economy. It’s about ensuring that the next generation can build wealth, security, and stability, not just for themselves, but for society as a whole.

If we fail to act now, we risk confirming the fears of millions: that the promise of homeownership in Britain is no longer broken, it’s been cancelled.

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Richard Dana is founder and CEO of mortgage and savings platform, Tembo.

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