The latest Property Insights report from Barclays suggests traditional barriers to homeownership are easing, indicated by smaller deposits, consistent demand for more affordable properties, and a growing preference for higher loan-to-value (LTV) mortgages.
The research also reveals that a third (34%) of those in the Gen Z age group questioned for the report hope to purchase a new or first home in 2026, with many already having significant savings set aside towards a deposit. In contrast, only 16% of those questioned across all age groups said they planned to buy a home this year.
Confidence in the housing market among 18-34 year olds improved from 33% in January 2025 to 40% in December, but almost two thirds (64%) of young prospective buyers cited high house prices as a challenge to home ownership. An even greater proportion (61%) sakid mortgage rates have a bigger impact on affordability than house prices.
Despite this, almost 59% of the Gen Z buyers questioned who said they’re planning to purchase in 2026 have already saved what they consider a significant amount towards a deposit.
On average, Gen Z savers have accrued £19,442, excluding financial assistance or inheritance, compared to £25,760 among all hopeful buyers. Gen Z adults expect to add a further £8,998 to their deposit pot throughout 2026, versus a national average of £11,023.
While the Bank of Mum and Dad remains influential – supporting a third (34%) of recent Gen Z buyers – perceptions around the necessity of support from family or friends appear to be easing.
Four in 10 (43%) of the Gen Z survey respondents said inheritance or financial assistance is now essential, compared to 63% at the start of 2025.
Perceptions around the barriers to homeownership eased among all age groups over the course of 2025, driven by a rise in transactions involving more affordable properties and smaller deposits. While property prices and deposits remain the greatest obstacles, at 41% and 39% respectively, these concerns are also notably lower than in January 2025, when 51% cited house prices and 44% said deposit costs were the main barriers.
Barclays Mortgage Book data shows that deposits below £20,000 accounted for 22% of first-time buyer purchases in December 2025, up from just 13% a year earlier. The average first-time buyer deposit fell by 14% year-on-year, while higher LTV borrowing increased slightly from 41% in 2024 to 44% in 2025.
“This shift to smaller deposits and higher LTVs suggests that first-time buyers are finding it easier to get on the property ladder, as lenders continue to introduce innovative mortgage products to help more people access the market,” Barclays said.
The changes to stamp duty bands in April 2025 also concentrated demand at the lower end of the housing market. Homes priced under £300,000 made up 72% of first-time buyer purchases in May 2025, up from 60% in April. Homes under £300,000 accounted for 65% of first time buyer purchases in December 2025, with an average of 67% since the change in thresholds.
“Our latest data shows clear signs that confidence in the housing market is beginning to stabilise, despite ongoing affordability pressures,” Jatin Patel, head of mortgages, savings and insurance at Barclays, said.
“Younger buyers, particularly Gen Z, are highly motivated to get on the property ladder and lenders are helping to meet this demand by providing innovative products that increase how much customers can borrow.”
Julien Lafargue, chief market strategist at Barclays, added:
“The UK economy continues to recover as the uncertainty surrounding the budget has dissipated. The recovery is slow yet real, which keeps us optimistic over the UK economy’s prospects in the first half of 2026.
“That said, the recent upward move in the unemployment rate is worth monitoring closely. But with additional interest rate reductions expected, we believe this headwind can be overcome.”
Mary-Lou Press, president of NAEA Propertymark, said the figures are encouraging but warned affordability pressures have not disappeared.
“House prices and mortgage rates continue to be significant obstacles for many, especially in areas where supply is constrained and over bidding is apparent. While lender innovation is welcome, it must be accompanied by sustained action to increase the supply of homes, built in the right places, across all tenures.”
