Reforms are needed to ensure homes are more affordable, more available and more appropriate for those living in them.

This is the conclusion of a new report from the Building Societies Association (BSA) which insists significant changes are required if we are to help prospective first-time buyers get on to the property ladder in the current housing market, without compromising the prospects of future generations of homebuyers.

The report, which has been authored by housing expert Neal Hudson and will be published in April, looks at the compromise between financial stability and growing the number of first-time buyers.

The report findings suggest that since the financial crisis this has tilted too far in favour of financial stability.

The inevitable cost of this imbalance has been the exclusion of many would-be homebuyers from the housing market. We now need a long-term strategy to make homes more affordable, more available and more appropriate for those living in them.

Some of the changes suggested 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.

BSA head of mortgage and housing policy Paul Broadhead commented: “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”.

He added: “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.”