Home ownership will become the central dividing line of financial security in Britain by 2050, with owning a home increasingly dependent on family wealth rather than hard work and saving, according to a long-term strategy report “Finance for a Fairer Future” from the Building Societies Association (BSA).

It warns that, unless action is taken, the gap between those inside and outside the housing market will widen significantly over the coming decades, creating a growing generational divide and making it harder for millions to build long-term financial security. The findings reflect growing concerns that many parents and grandparents already believe their children will struggle to achieve milestones that previous generations took for granted.

While housing affordability remains a pressing challenge today, the BSA argues the issue is part of a much broader shift. More people are expected to face unpredictable incomes, higher levels of debt, smaller savings buffers and less certain retirement incomes, leaving households carrying more financial risk than ever before. At the same time, an ageing population and increasing pressure on public finances mean individuals will be expected to take greater responsibility for funding later life, care and housing costs themselves. 

Homeowners will face increasing costs to adapt properties 

The report also warns that even owning a home will not guarantee financial security. Homeowners are likely to face growing costs to retrofit homes for climate change, adapt properties as they age, fund later-life care and help younger family members onto the property ladder. Housing wealth will increasingly become the asset families rely on to support future generations.

Financial resilience under pressure

Alongside the housing challenge, the report argues that Britain's financial resilience is set to weaken as technology reshapes the labour market, leaving more people with variable and unpredictable incomes. Higher levels of student debt, limited savings and the continued shift towards defined contribution pensions will place greater responsibility on individuals to manage financial risk throughout their lives. Artificial intelligence will transform the way people access financial services, but the report warns that increasing automation could leave some consumers behind. 

Building societies innovation will need to continue

We know that housing is a priority for the incoming Prime Minister, and as the first Labour and Co-operative Prime Minister he appreciates the value of customer-owned businesses like building societies.  

The BSA argues that financial institutions will need to evolve beyond traditional mortgages and savings accounts, developing new ways to support people through every stage of their financial lives, from building savings and buying a first home to managing later-life finances and intergenerational wealth.

Building societies and credit unions are well placed to help people navigate these growing financial pressures because they are built around long-term customer outcomes rather than short-term shareholder returns. They already support hundreds of thousands of first-time buyers each year, help people build savings and continue to innovate to meet changing customer needs through more flexible lending.

The report argues that, as financial lives become more complex, this innovation will need to continue at pace. That means developing products and services that better reflect modern financial lives, including expanding support for people with irregular incomes, better financial wellbeing guidance, later-life lending, intergenerational finance and new ways to help households build resilience before they face financial shocks. 

Building societies are supporting many of those facing the greatest barriers to home ownership. Over the past three years they have provided more than 360,000 mortgages to first-time buyers, while 39% of all their owner-occupied lending in the last 12 months went to people buying their first home. Through innovative lending criteria and a wider range of mortgage options, they are enabling many first-time buyers purchase sooner than they thought possible. The sector has also helped more than 1.5 million people start saving over the last two years, strengthening households’ financial resilience. 

The building society and credit union chief executives who are members of the BSA, have signed an open letter to the new Prime Minister expressing their support for the BSA’s ambitious new strategy, and calling on the new Government to update the outdated legislation which is holding the sector back 

Sarah Harrison, Chief Executive of the Building Societies Association said:

"Home ownership has long been one of the foundations of financial security in Britain. But unless we act now, we risk creating a society where owning a home depends less on hard work and careful saving, and more on whether your family has the wealth to help you onto the property ladder.

"At the same time, people's financial lives are becoming more complex. More variable incomes, longer lives and greater personal financial responsibility mean households will need trusted support to build resilience throughout their lives.

“Building societies are already showing that there are different ways to help people achieve home ownership, including many who might otherwise think buying is out of reach, and are helping millions build stronger savings habits. As people’s lives continue to change, we need to ensure the sector has the freedom to keep innovating, developing new products and services that reflect how people live and work today, while remaining true to our purpose of improving members’ financial wellbeing."

ENDS


Press contacts:

press.office@bsa.org.uk


Notes to Editors:

The Building Societies Association (BSA) represents all 42 UK building societies, including both mutual-owned banks, as well as 8 of the largest and most professional credit unions. Building societies and mutual-owned banks have total assets of almost £670 billion and together with their subsidiaries, hold residential mortgages of £499.1 billion, 29% of the total outstanding in the UK. They also hold £502.2 billion of retail deposits, accounting for 23% of all such deposits in the UK. Building societies and mutual-owned banks account for 46% of all cash ISA balances.  

With all of their headquarters outside London, building societies employ around 52,300 full and part-time staff.  In addition to digital services, they operate through approximately 1,300 branches, holding a 35% share of branches across the UK.