Authored by housing expert Neal Hudson, the report, scheduled for publication in April, focuses on striking a balance between financial stability and fostering increased opportunities for first-time buyers.

The report contends that, since the financial crisis, the emphasis on financial stability has disproportionately outweighed the goal of expanding the number of first-time buyers, resulting in the exclusion of many potential homebuyers from the market. To rectify this, the BSA advocates for a long-term strategy aimed at enhancing affordability, availability, and suitability of homes.

Key recommendations include:

• Reviewing the relative costs and benefits of a stricter regulatory environment versus those of higher homeownership rates to strike the right balance between financial stability and enabling access to home ownership.
• Changing regulation to allow mortgages to be more flexible. This could include allowing more part-repayment, part-interest only lending – with the flexibility to shift between them over the life of the loan.
• Reviewing the 15% cap on lending at 4.5 times income, including whether it should specifically support first-time buyers.

The biggest challenge facing first-time buyers is affordability – both affording the cost of buying a home and the cost of owning a home. The sizeable deposit generally required to get on the property ladder has been a barrier to homeownership for some time. However, the BSA Property Tracker Report shows that the recent interest rate rises have led to affordability of mortgage repayments being cited as the biggest challenge for would-be first-time buyers.

Building societies have a strong track record of providing innovative solutions to support those taking their first step onto the property ladder and are responsible for around one-third of first-time buyer mortgage completions. However, more radical reform is needed to fix our broken housing market.

Paul Broadhead, head of mortgage & housing policy at the BSA, said: “A properly functioning housing market is dependent on first-time buyers being able to afford their first home. Whilst building societies are creating bespoke, targeted innovations within the current regulatory framework, new thinking and radical changes are needed.

“Many things can be done to fix the broken housing market. But we need to ensure that changes to regulations and support schemes not only help today’s first-time buyers, but don’t fail future generations.”