Will I ever be able to buy a house?
If you are a young adult in the UK and you feel like home ownership has been pulled out of reach, that is because, for many people, it has genuinely moved further away in the last twenty years. You are not imagining it. But “harder than it was” is not the same as “impossible”.
Whether you can buy a home depends on four things working together: what you earn (and can evidence to a lender), the deposit you can pull together, how much you can borrow, and where you are willing or able to live.
Lenders generally lend about 4 to 4.5 times income, although some are providing loans of up to 6 or even 7 times income to first-time buyers now. A deposit of 5% is the minimum on most first-time buyer mortgages, 10% is far more comfortable, and a Lifetime ISA adds a 25% government bonus on top of what you save, up to £1,000 a year. If you are in your 20s, the Lifetime ISA is probably the single most powerful tool you have. For those who are lucky enough the Bank of Mum and Dad often steps in to help bridge the deposit gap or back a family mortgage product.
Most young adults in the UK who do end up buying a home do it through a combination of four things: a Lifetime ISA (LISA), a Help to Buy or shared ownership scheme (where still available), help from family and being realistic about the geography. The people who bought their first home in central London on a teacher’s salary no longer exist. The people buying their first home in Leeds, Sheffield, Newcastle, Nottingham, or Cardiff still absolutely do.
The LISA is genuinely the best deal the government offers any young adult. You put in up to £4,000 per tax year, the government adds 25%, and you can use it towards a first home up to £450,000. The catch is that you have to be 18 to 39 to open one, you lose the bonus (and pay a penalty) if you withdraw for anything other than a first home or retirement, and the £450,000 cap has not moved for years. For most of the country it is still fine. For London and the South East it is tight.
The honest bit: if your income is genuinely not high enough and your area is genuinely expensive, renting for longer, investing surplus cash to build a nest egg, and buying later is not a failure. It is a rational response to a broken market. The worst outcome is stretching for a mortgage you cannot afford and losing the house when interest rates move. Buying is not always the right approach for everyone.
What you can actually do this week
- Open a Lifetime ISA if you are 18 to 39 and do not already have one. Even putting in £25 opens the clock on the bonus.
- Check your credit report (free through Experian, Equifax, or ClearScore). Lenders will. You should.
- Use a mortgage affordability calculator with your real numbers. Knowing what a lender would actually offer you means you can make sense of what is available with your deposit.