For several decades now, Britain has been heading towards an enormous economic iceberg. And, instead of changing course or stopping to properly assess the danger, some politicians looked the other way while others, somewhat unfathomably, accelerated towards it.

That iceberg is Britain’s housing market.

And now, the eminent and reputable Building Societies Association (BSA) has issued a stark warning: if nothing changes, by 2050, the dividing line between homeowners who have financial security and everyone else in this country will be as sharp as it is stark.

Through the 1990s and early 2000s, homeownership rose steadily, peaking at almost 70 per cent of the population. After the financial crisis, it declined. This was particularly the case amongst younger adults who no longer met strict mortgage requirements, including the need for large deposits and high incomes, as house prices rose to historic highs.

So serious is the situation now that the BSA’s new report – Finance for a Fairer Future – is raising the red flag that Britain’s housing crisis is now a major threat to the “financial resilience” of the country as a whole. This might sound shocking, but it should not come as a shock. The writing has been on the wall for some time now.

In recent years, house prices have continued to outpace incomes, stretching affordability to its limit. In 1997, when Labour were last in power, house prices in England and Wales were on average about 3.6 times a full-time worker’s annual gross earnings. About 88 per cent of local authorities were deemed affordable (that’s under 5 times the average person’s earnings in that area).

Today, as Labour presides over the corridors of power once again for the first time since 2008, the house price to earnings ratio has more than doubled. Average homes require roughly 7 to 8 times a person’s annual earnings nationally, and only around 7 per cent of local areas meet the traditional affordability threshold of being 5 times or less than average incomes in any given area.

All told, this means that a growing number of people (thought to be more than 10 million) are locked out of homeownership and trapped in private renting. When they retire, they will not have assets that they can cash in as homeowners do but, instead, will be required to pay rent. It’s also worth noting that people who have bought homes recently at the top of the market may also be in precarious positions, repaying large long-term mortgages into retirement.

So, homeownership is no longer the economic panacea it once was for a growing number of people. Andy Burnham has long said fixing the housing market was a priority for him. He’s promised to build more houses but he’ll need to think more radically than just bricks and mortar.

The BSA are concerned that Britain’s stalling homeownership and inflated housing market are now at risk of colliding with another problem: the fact that big tech is reshaping our labour market, potentially leaving an even greater number of people with “variable and unpredictable incomes”.

All of this, piled on top of the fact that young adults today in their 20s, 30s and early 40s have high levels of student debt compared to previous generations, less money in savings and defined contribution pensions (as opposed to defined benefit or final salary pensions that some baby boomers are enjoying), means that financial instability is becoming a worrying fact of life for more and more members of younger generations.

Sarah Harrison is chief executive at the BSA. She told me that more action was needed to improve affordability of housing. This could be done by building more homes and allowing people to borrow more in relation to their income. If this doesn’t happen, she warns that “the gap between people inside and outside of homeownership will widen significantly over the coming decades, creating a growing generational divide and making it harder for millions of people to build long-term financial security.”

Building societies have always been innovative. Harrison notes that they started as groups of people coming together to raise funds and buy land to build homes for “working men who couldn’t otherwise afford a home” and says that they will continue to innovate with products like “zero-deposit mortgages”. But, even so, she is concerned about the direction of travel for Britain’s housing market and the economic implications of the current (and very unaffordable) status quo.

Harrison says the BSA is concerned about both the impact on young adults’ lives – “people are delaying moving out of home and starting families”, she says – and Britain’s long-term economic prospects.

A major problem, as Harrison sees it, is that building societies are subject to the same rules as if they were large banks, even though the risks are not the same. This means they are not always able to lend to as many people as they’d like to buy homes. The BSA would like this to be addressed by government.

And therein lies the rub.

As I reported at the end of 2025, when Rachel Reeves was still chancellor, restrictions on how much young people can borrow were relaxed – which Reeves announced to me in an exclusive interview – in a bid to help get mortgage credit to more young adults. Nationwide – a major national building society – was able to expand its “Helping Hand” first-time buyers mortgage because of this. But extending the amount that young adults can borrow in relation to their earnings will come at a cost because they will be taking on large debts, probably for longer than their parents and grandparents did.

If 2008 exposed the potential for mortgage-lending to derail the world’s major economies by allowing borrowers to over-extend themselves, in 2026 we are learning that a stalled housing market can not only stall people’s life chances but also the economy, too.

The problem Britain faces is high house prices. The solution is building more homes, which will take time. And, if you’re currently 35 years old, stuck in a private rental and wondering if you can afford to have a family, time is the one thing you may not have.