The UK risks creating a "lost generation of homeowners" as confidence in buying a home falls sharply after people reach their mid-40s, despite homeownership remaining a key aspiration, a new report by the Yorkshire Building Society has warned.

According to the report, 'No Way Home? Restoring Britain's Housing Ladder', while 88% of adults said owning a home was important, the proportion hoping to buy dropped from 76% among 25 to 34-year-olds to 38% for 45 to 54-year-olds and just 8% for over-65s.

Given 45 is the age of the oldest millennial, the study suggested that if people haven’t achieved their dream of owning their own home by then, they assume they might never do so.

A range of real and perceived barriers are contributing to their declining hopes, including difficulty saving for deposits, affordability pressures, lack of confidence in navigating the mortgage process, limited supply of suitable homes and high costs and friction when moving

The institution called for reforms including stamp duty changes, a replacement for Help to Buy, greater lending flexibility and increased housing supply to restore the housing ladder.

Tom Simpson, managing director of homes at Yorkshire Building Society, said: "People still see owning a home as central to their future, but for too many the dream starts to feel out of reach.

"We need government, industry and lenders to come together as they never have done before, to create a system that works from start to finish: helping people become ready to buy, helping more people access ownership, and making it easier for them to move on when the time comes. That’s what a functioning housing market should do — and right now, it isn’t doing it well enough."

The report outlined both the views of over 4,000 UK adults and economic modelling, to demonstrate just how the system is currently failing to support people at different stages of the housing journey.

"Addressing these challenges requires a broad and balanced response. We must continue to make homeownership more accessible – closing the gap between strong aspiration and limited opportunity or confidence,” added Susan Allen, CEO at Yorkshire Building Society.

"The priorities outlined in this document – backed by compelling evidence – provide tangible steps to a better-functioning housing market and reflect our belief that this is both achievable and necessary."

The report was backed by the Intermediary Mortgage Lenders Association (IMLA), which said around 3.5 million households that might have become homeowners since the 2008 financial crisis are still waiting to get onto the housing ladder.

"This report makes a compelling and evidence-based case for why homeownership still matters deeply to people, despite becoming increasingly difficult to achieve," said Kate Davies, executive director of IMLA.

IMLA also argued many prospective first-time buyers wrongly assume they cannot obtain a mortgage and urged them to seek advice, while calling for greater housing supply and renewed government support to improve access to homeownership.

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