Why can't young people afford to buy a house? It's not the avocado toast

For years, young people have been told that giving up fancy coffees and avocado toast is the secret to getting on the property ladder. But with the average first-time buyer in England now aged 34, the figures suggest the problem is considerably bigger than an expensive breakfast.

Back in 2017, Australian millionaire property developer Tim Gurner sparked a debate that would come to define an entire generation of frustrated first-time buyers.

Speaking on Australian television, he suggested that millennials were making it harder for themselves to buy a home by spending money on things like $19 avocado toast and fancy coffees.

Nearly a decade later, the avocado toast argument is still going strong. Apparently, the secret to buying a house has been hiding on the brunch menu all along.

Except the figures tell a rather different story.

House prices, wages and the amount buyers need to save for a deposit have changed enormously over the years. And with the government now introducing a new scheme allowing eligible first-time buyers to purchase a home with just a 2.5% deposit, there's growing recognition that saving for a first home isn't as simple as cutting back on a few little luxuries.

So why are young people struggling to buy houses, how much do first-time buyers actually need to save, and could the new government support finally make a difference?

Why can't young people afford to buy a house in the UK?

The biggest challenge facing many first-time buyers isn't avocado toast or takeaway coffee. It's the gap between how much homes cost and how much people earn.

According to the Office for National Statistics (ONS), the average-priced home in England cost 7.6 times the median annual earnings of a full-time worker in 2025.

That's based on a median house price of £300,000 and median annual earnings of £39,300.

In Wales, the equivalent figure was six times annual earnings, demonstrating that affordability varies considerably depending on where someone wants to live.

Although housing affordability has improved somewhat since 2021, when the ratio between house prices and earnings reached its recent peak, buying a home remains a significant financial challenge.

And that's before considering the cost of rent, household bills, transport and everything else people need to pay for while trying to save.

For someone putting money aside for their first home, the challenge isn't necessarily that they're spending too much on things they don't need. It's that there's often very little left to save after covering everyday living costs.

What is the average age of a first-time buyer in the UK?

According to the latest English Housing Survey, the average first-time buyer in England was 34 years old in 2024/25.

In London, the average was slightly higher at 35.

That represents a notable shift from previous generations. Research published by Skipton in March 2026 found that the average age of recent first-time buyers in England had increased from 29 in the mid-1990s to 34 today.

The proportion of first-time buyers under the age of 25 has also fallen dramatically.

Around three decades ago, nearly one in four first-time buyers was under 25. Today, it's closer to one in 15.

And it's becoming increasingly difficult to buy alone. Skipton's research found that more than half of recent first-time buyers now need two or more full-time incomes to afford their home, compared with 40% in the late 1990s.

For young people hoping to move out on their own, those figures help explain why getting onto the property ladder can feel like a much more distant goal than it did for their parents.

How much deposit do first-time buyers need in 2026?

One of the biggest barriers to buying a first home is saving enough for a mortgage deposit.

Most first-time buyers will typically need a deposit of at least 5% of the property's value, although some mortgage products and government schemes work differently.

And while 5% might not sound like much, it quickly becomes a significant amount of money when you're buying a house.

For example, here's what a 5% deposit would look like at different property prices:

• £150,000 home: £7,500 deposit.

• £200,000 home: £10,000 deposit.

• £250,000 home: £12,500 deposit.

• £300,000 home: £15,000 deposit.

For a 10% deposit, those amounts double.

And the deposit isn't the only upfront expense. Buyers also need to budget for things like solicitors' fees, property surveys, moving costs and potentially Stamp Duty.

It's easy to see why saving for a first home can take years, especially for people paying rent at the same time.

Even someone managing to save £200 a month would need more than five years to build a £12,500 deposit from scratch, without accounting for savings interest or changes in property prices. That's a lot of avocado toast to give up.

Are house prices rising faster than wages?

Over the longer term, house prices have become considerably less affordable compared with earnings, although the picture has improved slightly in recent years.

ONS figures show that housing affordability in England and Wales improved in 2025, as earnings increased faster than house prices.

However, the average home in England still cost more than seven times a typical full-time worker's annual earnings.

That matters because mortgage lenders don't just look at whether you've saved enough for a deposit. They also assess whether you can afford to repay the money you're borrowing.

Someone might have managed to put together a £15,000 deposit, only to find that their income isn't high enough to qualify for the mortgage they need.

Higher mortgage interest rates can make the situation harder, increasing monthly repayments and potentially reducing how much a lender is prepared to offer.

So even when a first-time buyer manages to save the deposit, getting approved for a mortgage can be another hurdle entirely.

Do older generations own more homes than young people?

Older households are considerably more likely to own their homes than younger households, partly because they've had more time to buy a property and pay down their mortgages.

Younger adults are also more likely to be renting while saving for their first home, particularly in areas where property prices are high relative to local wages.

This creates a challenge for people trying to build up savings, because the money they could potentially put towards a deposit is already being spent on housing.

It's also why comparing the spending habits of someone buying their first home today with those of someone who bought decades ago doesn't necessarily tell the whole story.

The financial circumstances are different, and so is the amount of money needed to take that first step.

What help is available for first-time buyers in 2026 and 2027?

The government announced new support for first-time buyers in the Autumn Budget on 28 October 2026, including changes to Lifetime ISAs and a new scheme designed to help people buy a home with a smaller deposit.

The most significant announcement was the Your First Home scheme, which will allow eligible buyers in England to purchase certain new-build properties with a deposit of just 2.5%.

For buyers whose biggest obstacle is saving enough money upfront, that could make a meaningful difference.

What is the new Your First Home 2.5% deposit scheme?

Your First Home is a government-backed scheme designed to help eligible first-time buyers purchase a new-build property in England.

Under the scheme, buyers will be able to use:

• A deposit of at least 2.5% of the purchase price.

• A government equity loan worth 20% of the property's value.

• A repayment mortgage from a participating lender to cover the remaining amount.

The government equity loan will be interest-free for the first five years.

This means buyers could potentially get onto the property ladder with half the deposit they'd need for a typical 5% deposit mortgage.

How much could you save on a deposit with Your First Home?

Let's imagine you're buying a £300,000 property.

With a traditional 5% deposit mortgage, you'd generally need to save £15,000 upfront and borrow the remaining £285,000.

Under Your First Home, the purchase could instead be funded through:

• Your deposit: £7,500 (2.5%).

• Government equity loan: £60,000 (20%).

• Repayment mortgage: £232,500 (77.5%).

That means needing £7,500 less for the initial deposit, alongside a smaller mortgage.

For someone saving £200 a month, the £7,500 difference represents more than three years of saving, without accounting for interest or other changes.

However, there is an important catch.

The government equity loan isn't free money, and the amount you eventually repay will be linked to the property's value.

What happens to the government equity loan after five years?

The equity loan will be interest-free for the first five years, but interest charges will apply after that.

Under the scheme's published terms, interest will be charged at:

• 0% in years one to five.

• 1.5% in year six.

• 3% from year seven.

These interest payments don't reduce the equity loan itself.

You'll normally repay the loan when you sell your property, although you'll also be able to repay some or all of it earlier.

Because the loan is linked to the value of your home, the amount you repay could increase if your property becomes more valuable.

For example, if you borrowed £60,000 through a 20% equity loan on a £300,000 property, but your home was worth £320,000 when you repaid it, you would normally owe £64,000.

If the property's value fell to £280,000, the equivalent repayment would be £56,000.

It's important to understand the longer-term costs before choosing the scheme, rather than focusing only on the smaller deposit.

Who is eligible for the Your First Home scheme?

The government has confirmed that buyers will normally need to meet the following conditions:

• Be a first-time buyer.

• Buy an eligible new-build property in England.

• Buy a home within the relevant local property price cap.

• Use the property as their main residence.

• Have a household income of £110,000 or less outside London, or £140,000 or less within London.

• Be able to secure a mortgage from a participating lender.

The full eligibility criteria will be published before applications open.

When can first-time buyers apply for Your First Home?

The government expects to open customer pre-registration before the end of December 2026.

Full applications are expected to open in February 2027, with the first purchases through the scheme anticipated from April 2027.

Pre-registration won't commit someone to purchasing a home through the scheme, but should provide more information about eligibility and local property price caps.

Can a Lifetime ISA help you save for your first home?

Another way first-time buyers can build up a deposit is through a Lifetime ISA, often shortened to LISA.

Eligible savers can pay in up to £4,000 each tax year and receive a 25% government bonus, worth up to £1,000 annually.

That's one of the few opportunities to get extra money towards a first-home deposit simply by saving.

However, there are conditions. To use a Lifetime ISA towards a qualifying first-home purchase without a withdrawal charge, the property must cost £450,000 or less, and you must meet the other qualifying requirements.

The Autumn Budget 2026 included a change for savers buying their first home above that price cap.

What changed to the Lifetime ISA withdrawal penalty in the Autumn Budget?

From 29 October 2026, the withdrawal charge for qualifying first-home purchases above the £450,000 property cap fell from 25% to 20%.

This means affected savers generally lose the government bonus when withdrawing their money to buy an eligible first home above the cap, rather than losing some of their own contributions as well.

The £450,000 property price cap itself hasn't increased, and the usual 25% charge still applies to other unauthorised withdrawals.

It's a useful improvement for people whose intended purchase has moved beyond the price limit, although it doesn't address the broader challenge of saving enough to buy a home in the first place.

Can first-time buyers finally get onto the property ladder?

Homeownership has changed enormously over the last few decades, and today's first-time buyers face challenges that previous generations didn't necessarily experience in the same way.

The new Your First Home scheme could make buying more accessible for eligible households struggling to save a deposit, while changes to Lifetime ISA rules may help people avoid losing some of their own savings when purchasing a home above the existing cap.

However, schemes that reduce the amount needed upfront don't automatically solve the wider problem of housing affordability.

Buyers will still need to qualify for a mortgage, afford their monthly payments and understand the longer-term costs of any government support they use.

And while cutting back on small luxuries might help someone save a little faster, the idea that young people are struggling to buy homes simply because they like avocado toast doesn't stand up to much scrutiny.

After all, if the solution to the housing crisis really were as simple as skipping brunch, we'd have sorted it out years ago.