First-time buyers are increasingly reliant on the Bank of Mum and Dad and on combining two incomes in order to get onto the ladder, a report by housing analyst Neal Hudson for the BSA, claims.

This often leaves singles and those without financial support from family stuck in the rented sector.

Higher mortgage rates have only worsened the situation in recent years, creating an even bigger affordability gap for buyers, the report finds.

The BSA says that mutuals have the potential to increase lending to first-time buyers but are hindered by regulation.

The trade body is calling on government to commission a comprehensive and independent review of housing policy with a view to making home ownership more affordable.

BSA head of mortgage and housing policy Paul Broadhead says: “Becoming a first-time buyer is possibly the most expensive it has been over at least the last 70 years, but a properly functioning housing market is dependent on first-time buyers being able to afford their first home.”

The Intermediary Mortgage Lenders’ Association has backed the BSA’s call.

Executive director Kate Davies says “The UK is an advanced economy which is home to one of the most diverse, competitive and innovative mortgage industries in the world.

“And yet we are in the midst of a housing crisis, with fewer affording to buy a home, and more renters struggling to secure accommodation.

“There is a viable argument for Government-backed first-time buyer support, which must be accompanied by a sustainable plan to deliver more quality, affordable housing on a major scale, in both the private and social sectors.”

She points out that the Government should acknowledge that landlords play a crucial role in providing housing and should be supported and not penalised.

Nationwide director of mortgages and financial wellbeing Rachael Sinclair adds: “Getting onto the property ladder remains as tough as ever, with our latest research showing that one in five prospective homeowners don’t think they’ll be able to buy until their forties.  

“Collaboration is key if we are to resolve the first-time buyer conundrum and is why we are pleased to have worked with the Building Societies Association on this report, which calls for an independent review of the FTB market.  

“Without a collaborative approach, we risk the wheels spinning on the homeownership crisis indefinitely.” 

The BSA’s report was produced in collaboration with Nationwide, Coventry Building Society, Leeds Building Society, Skipton Building Society and Yorkshire Building Society.