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UK first-time buyers face a housing ladder challenge amid high costs
Mortgage and construction market changes have been driven in part by decades of underbuilding and a sharp rise in material and energy expenses, with build costs for a typical home climbing from £150,000 in 2015 to £230,000 now.
For people in the UK born in the mid-1990s, there is about a 25% chance of owning a home, compared with higher rates for earlier cohorts, according to data discussed in a BBC Business analysis published in August 2026.
The analysis points to structural supply constraints, saying England needs another 300,000 dwellings per year to keep pace with population change and smaller household preferences, while only 208,000 homes were added last year. It adds that the UK has not built close to 300,000 new homes in a year for at least three decades.
Rising construction costs are described as a key factor, with raw material expenses such as timber, steel, plasterboard, concrete, and insulation tracked against general inflation until shortages and pricing pressures accelerated during and after the Covid-19 pandemic. The war in Ukraine is cited as driving up energy costs by 15% in a single year for construction materials and use in building, and the war in Iran is also noted as pushing prices higher.
The report also highlights labor and regulatory pressures, including that more than one in five construction firms struggled with a lack of skilled staff before the pandemic, alongside the impact of Brexit. It says analysts expect the cost of building to rise further by about 15% over the next five years, and that planning rules can add additional cost as housebuilding becomes less predictable.
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