Barclays Property Insights suggests student loan repayments are continuing to weigh on first-time buyers, with those carrying the debt saving £1,964.40 less a year towards a house deposit than those without outstanding loans.

The lender’s research found that people with student debt put aside an average of £310 a month for a deposit, compared with £473.70 among those without a loan. Barclays said this underlined the extent to which external costs are influencing how prospective buyers approach homeownership.

Its consumer data also found that 44% of student loan holders believe their repayments make it harder to achieve long-term financial stability, while 41% said the debt is making it more difficult to save for a home. Nearly a third, 32%, said they do not expect ever to repay their student loan in full.

Deposit costs remain a central obstacle to homeownership more broadly. Barclays said 43% of renters identified the cost of building a deposit as the biggest barrier to buying.

STAMP DUTY AND BUYING BEHAVIOUR

Faced with those pressures, many first-time buyers appear to be targeting lower-value homes in order to reduce upfront costs. Barclays mortgage completions data showed that properties bought for less than £300,000 accounted for 68.5% of first-time buyer purchases in February 2026, up from 60.9% in February 2025.

The figures point to a growing focus on homes below the stamp duty threshold as buyers look for savings wherever they can find them.

At the same time, Barclays said first-time buyer demand over the past 12 months has continued to lean towards houses rather than flats. Semi-detached and detached properties accounted for 48.8% of first-time buyer purchases, compared with 18.2% for flats.

The lender suggested this reflected an emphasis on longer-term suitability, particularly among younger buyers seeking homes that can accommodate future lifestyle changes.

UPGRADE DEMAND

Energy efficiency is also moving further up the agenda. Barclays found that 82% of UK adults are concerned that conflict in the Middle East could push up oil, gas and fuel prices, while 56% of homeowners said energy efficiency improvements are now essential rather than optional because of utility costs.

That comes with a significant price tag. Homeowners planning or undertaking renovations said the average expected cost was £26,323.80.

Against that backdrop, 49% of homeowners said they would rather buy a new-build or recently renovated home than take on upgrade costs themselves. A further 47% said they were concerned about the cost of repairing and improving their property as it ages.

Younger consumers were more likely to favour newer stock. Barclays said 52% of Gen Z respondents would pay a premium for a new-build instead of buying an older, cheaper property that may require expensive works later. Among Gen X, that figure fell to 37%.

FURTHER ADVANCES

Existing homeowners are increasingly drawing on housing equity to pay for those improvements. Barclays mortgage data showed that additional borrowing on an existing mortgage, or further advances, made up 11.7% of mortgage completions in February, the highest share recorded over the past 12 months.

The lender’s research found that 30% of mortgage holders have either recently increased, or are planning to increase, their borrowing as part of a remortgage. Meanwhile, 22% said they have released, or plan to release, equity from their home.

Among those who said they had raised funds in this way during the past five years, the average amount borrowed or due to be released was £47,524. Home improvements were the most common reason, cited by 40%. Large purchases followed at 17%, while 15% said the funds were intended to support a family member.

RATE CONCERNS REMAIN

Barclays also said recent increases in fixed mortgage rates across the market are feeding into borrower sentiment. More than a third, 37%, of homeowners on fixed-rate deals said they believe it is likely their mortgage costs will rise in the coming months.

For many households, however, the immediate impact may be limited by the timing of product expiries. Just 1% of mortgage holders said their current deal ends within the next month, rising to 8% over the next three months.

On overall resilience, 43% of mortgage holders said they feel financially resilient. That compared with 54% of outright owners and 31% of renters.

CLEAR SHIFT

Jatin Patel, head of mortgages, savings and insurance at Barclays, said: “Rising external costs are reshaping how the UK approaches homeownership.

“Student loan repayments are slowing deposit saving for many aspiring buyers, while volatile energy prices are forcing households to think much harder about the long-term running costs of their homes.

“With homeowners unlocking value in their property for upgrades, we’re seeing a clear shift towards investing now to improve future financial resilience.”

PLANNING AHEAD

And he added: “Homeowners are understandably concerned about rising fixed-rates across the market, but it’s important to remember that there are options available.

“This can provide peace of mind for those who want to protect themselves against short-term volatility, whilst planning ahead.”