Former Help to Buy director warns of UK 'deposit affordability crisis'

Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.

Former Help to Buy director warns of UK 'deposit affordability crisis'

A former Help to Buy director has argued that the UK mortgage market has focused too heavily on affordability while overlooking the challenge of saving a deposit. Chris Lee warned that the country is facing a "deposit affordability crisis", despite continued demand for homeownership among aspiring buyers.

Deposit problem 'not being solved'

Lee said the aspiration to own a home remains strong, but many potential buyers are struggling to accumulate the funds needed to purchase a property. He suggested the issue has received less attention than mortgage affordability because banks are heavily regulated and focused on managing their own balance sheets and profits.

As a result, he argued, lenders have largely refined existing products rather than introducing genuinely new solutions for first-time buyers.

Lee acknowledged the growing number of products aimed at first-time buyers but noted that many do not apply to new-build properties. In his view, this serves primarily to increase demand for existing housing stock rather than supporting the delivery of new homes. "We need more homes in general," he said, adding that current approaches are not doing enough to expand homeownership through new supply.

Low-deposit mortgage claims 'misleading'

Lee also challenged the marketing of low-deposit mortgages, suggesting that claims buyers need only £5,000 to purchase a home can be misleading. He described the £5,000 figure as a marketing tool, noting that purchasers must also cover costs such as conveyancing, valuation and mortgage application fees, increasing the amount required upfront.

Alternative routes into homeownership

For buyers without support from the 'Bank of Mum and Dad' or the ability to spend years saving, Lee said alternative routes into homeownership are needed. He founded OwnHomes, a rent-to-buy initiative currently in the fundraising stage, which purchases a property on behalf of a prospective buyer. Occupants make monthly payments while building towards a deposit for a future 95% loan-to-value mortgage, with around 30-35% of each monthly payment placed into a ring-fenced deposit account, according to Lee.

"If you don't have Bank of Mum and Dad, and you haven't saved 13 years for a deposit, we want to give people a viable alternative," he said.

What this means for letting agents

For letting agents and inventory clerks, the reported strength of deposit-saving challenges and the emergence of rent-to-buy schemes such as OwnHomes may be relevant to tenant conversations around longer-term housing plans and moves towards homeownership.