11th July 2026
When today's young adults talk about the difficulty of buying a home, an often-heard response is:
"People managed before. They just saved up and bought a house."
There is some truth in that. Previous generations did save, work hard and make sacrifices.
But the housing market they entered was very different from the one facing many first-time buyers today.
One major difference was the role of government support through the tax system.
Many older homeowners remember a scheme called MIRAS — Mortgage Interest Relief at Source.
For younger generations, it is almost unknown.
Yet for many years it helped millions of households afford their first home.
What Was MIRAS?
MIRAS stood for Mortgage Interest Relief at Source.
It was a tax relief system that reduced the cost of mortgage interest for homeowners.
Instead of paying all the mortgage interest themselves and then claiming tax relief, the relief was built into the mortgage payment system.
In simple terms, the Government helped reduce the effective cost of borrowing.
For many first-time buyers, this made a significant difference when deciding whether they could afford a mortgage.
Why Was MIRAS Introduced?
MIRAS was introduced at a time when encouraging home ownership was a major government policy.
The post-war period saw a large expansion in private home ownership.
Governments of different political parties supported the idea that owning a home provided:
financial security;
independence;
a long-term asset;
stability for families.
Tax relief on mortgage interest was one way of supporting that ambition.
How Did It Help Buyers?
The amount of help depended on:
the size of the mortgage;
the interest rate;
the borrower's tax position;
government rules at the time.
At its peak, MIRAS provided a noticeable reduction in mortgage costs.
For households struggling to get onto the property ladder, this could make the difference between renting and buying.
However, it is important not to exaggerate its effect.
MIRAS did not make houses cheap by itself.
The biggest difference between then and now was the relationship between house prices and wages.
The Higher-Rate Tax Advantage
One aspect of MIRAS that is often forgotten today is that the benefit was linked to the borrower's tax position.
For people paying higher rates of income tax, the value of mortgage interest relief could be considerably greater than for someone paying basic-rate tax.
This meant that some professional and higher-income households received a larger subsidy towards their mortgage costs during the years when they were building their first home.
The effect was particularly powerful because the early years of a mortgage are when interest payments are at their highest.
A homeowner might borrow a substantial amount, receive tax relief on the interest, make regular repayments and gradually reduce the mortgage balance.
At the same time, if house prices were rising, the value of the property could increase faster than the remaining mortgage debt.
The result was that many homeowners built equity relatively quickly.
For example, someone who bought a house for £40,000 and reduced their mortgage while the property value rose to £80,000 did not just gain from paying off debt—they also benefited from the increase in the asset itself.
Why This Matters Today
The modern housing market is very different.
Mortgage interest relief has disappeared, and most homeowners receive no direct tax assistance for their mortgage.
Today's buyers generally have to build their deposit through:
personal savings;
family assistance;
inheritance;
or government-backed schemes.
The earlier combination of tax support and strong house price growth helped many previous generations move from being first-time buyers to established homeowners.
That does not mean buying was easy. Many faced high interest rates, economic downturns and periods of unemployment.
But the financial environment gave many homeowners a route to building wealth that is much harder for today's first-time buyers to follow.
House Prices Compared With Earnings
One of the biggest changes over recent decades has been affordability.
Previous generations often bought homes when prices were much lower compared with average earnings.
A typical house price might have represented a few years of income.
Today, in many parts of Britain, house prices represent a much larger multiple of local wages.
This means a deposit has become a major barrier.
The difficulty is not always the monthly mortgage payment.
It is getting enough money together to start.
The End of MIRAS
MIRAS was gradually reduced and eventually abolished in 2000.
By then, policymakers argued that the housing market had changed and that direct tax support for mortgage interest was no longer appropriate.
Critics also argued that schemes like MIRAS could increase house prices because buyers had more money available.
The argument was that if government helps people borrow more, sellers may simply raise prices.
But Older Buyers Faced Their Own Challenges
It would be wrong to suggest that buying a home was always easy.
Previous generations experienced periods of severe difficulty.
Many homeowners in the late 1980s faced mortgage interest rates above 10%.
Some lost their homes during the recession.
Young buyers in the past also faced:
fewer employment opportunities in some areas;
lower wages;
smaller homes;
less choice.
The difference was that the overall relationship between wages and property prices was often more favourable.
Other Advantages Previous Generations Had
MIRAS was only one part of a much wider picture.
Many older homeowners also benefited from:
Lower house prices
Properties were often cheaper compared with earnings.
Council house sales
The Right to Buy policy allowed many tenants to purchase their homes, creating new homeowners.
Long-term employment
Many workers had secure jobs with one employer for decades.
Different expectations
Many people bought smaller homes initially and gradually moved up the property ladder.
Why Today's Buyers Face a Different World
Modern first-time buyers face a combination of pressures:
high property prices;
larger deposits;
higher rents while saving;
student loan repayments;
less secure employment;
higher construction costs.
In many areas, young people are not failing to save.
They are trying to save in a market where the target keeps moving further away.
Rural Scotland Shows the Difference Clearly
The Highlands provide an interesting example.
A house may cost less than in southern England, but local wages are also lower.
Young people can find themselves caught between:
homes that are expensive relative to local incomes;
limited well-paid employment;
competition from second homes and holiday properties.
This helps explain why some young people leave even when they would prefer to stay.
Could Housing Support Return?
There is ongoing debate about whether governments should provide more help for first-time buyers.
Possible approaches include:
tax incentives;
shared ownership schemes;
more affordable housing;
changes to planning rules;
support for house building.
However, policymakers face a difficult question:
Does helping buyers actually improve affordability, or does it simply push prices higher?
The Bigger Lesson
The housing market is not shaped only by individual effort.
It is shaped by:
interest rates;
taxation;
government policy;
wages;
availability of land;
construction costs;
population changes.
MIRAS was one example of how government decisions influenced home ownership.
Its removal was another.
The Debate
The debate about housing often becomes a disagreement between generations.
Older homeowners may feel younger people underestimate the challenges they faced.
Younger buyers may feel older generations benefited from a system that no longer exists.
The reality is that both generations entered very different housing markets.
Previous generations benefited from policies such as MIRAS and generally cheaper homes compared with wages.
Today's buyers face different pressures, particularly the huge increase in the cost of property relative to earnings.
Understanding how the rules changed helps explain why home ownership has become such a difficult issue.
The housing ladder has not disappeared—but the first rung has moved much higher.