A growing number of younger buyers are willing to compromise on location in order to secure a home, as affordability challenges continue to shape purchasing decisions across the UK housing market.

New research from Barclays suggests that one in five Gen Z buyers would consider moving more than 25 miles from their preferred area in order to find a home they can afford, highlighting the extent to which cost pressures continue to influence homebuying decisions.

The latest Barclays Property Insights report found that price has overtaken location as the most important consideration for buyers aged 18 to 29. Almost a quarter (24%) of Gen Z respondents cited affordability as their top priority when purchasing a property, ahead of location (19%) and neighbourhood quality or safety (17%).

A quarter (25%) of Gen Z renters said they could not afford to buy in their preferred area, with location emerging as the factor most likely to be sacrificed in pursuit of homeownership.

The findings come despite an improvement in wider housing market sentiment. Confidence in the UK housing market increased to 26% in May, up from 23% in April.

Affordability remains the primary obstacle for renters hoping to buy. More than a third (37%) identified saving for a deposit as the biggest barrier to homeownership, while 36% pointed to high property prices. In contrast, only 16% cited monthly mortgage repayments as their main concern.

Barclays mortgage data showed that the average deposit required across all age groups fell by 16.4% year-on-year to £57,209 in May. However, significant regional variations remain.

London recorded one of the largest declines, with average deposits falling 27.2% from £186,960 to £136,057. The South East saw average deposits fall by 22.8% to £70,454, while East Anglia recorded a 23.5% decline to £55,063.

Despite these reductions, affordability pressures continue to affect younger buyers. One in seven Gen Z adults (14%) said they had reduced their budget or lowered their expectations due to housing costs.

At the same time, demand among younger buyers appears to be strengthening. Sixteen per cent of Gen Z renters said they were actively searching for a property to purchase, up from 7% the previous month.

TRANSACTION DELAYS CONTINUE TO FRUSTRATE BUYERS

The research also highlighted ongoing delays within the homebuying process.

Nearly nine in 10 buyers and sellers (88%) who completed transactions this year reported experiencing delays, while 29% said a purchase had fallen through.

Barclays mortgage data showed that the average time between receiving a final mortgage offer and completion increased by 21.7% year-on-year.

Conveyancing issues were identified as the most common cause of delays, cited by 21% of respondents. Estate agent delays followed at 19%, while 18% pointed to difficulties finding suitable properties.

Economic uncertainty is also influencing consumer behaviour. Three in 10 people (30%) said they are now more likely to postpone buying or selling a property because of economic volatility, while 32% said they were increasing savings or reducing spending as a precaution.

REMORTGAGE ACTIVITY INCREASES

While purchase activity faces delays, existing homeowners appear to be taking a more proactive approach to managing borrowing costs.

More than two-fifths (42%) of mortgage holders said they are now more likely to secure a remortgage deal early. Barclays reported that remortgages accounted for 40.6% of mortgage completions in May, compared with 30.7% during the same month last year.

Jatin Patel, head of mortgages, savings and insurance at Barclays, said: “Adaptability has become the hallmark of the modern buyer. First-timers remain constrained by affordability, but will be flexible to achieve their goals, making trade-offs on location or property features to get on the ladder.

“Meanwhile, existing homeowners are acting more decisively, with many locking in rates earlier, or shifting their plans in response to volatility.

“Together, these trends may make for a more complex housing landscape, but reflect a clear determination among consumers to take control of their financial future.”

Julien Lafargue, chief market strategist at Barclays, said: “The expected reopening of the Strait of Hormuz and the associated drop in oil prices mean that inflationary pressures may be more contained than feared in the coming months.

“This should give the Bank of England some breathing room, allowing the central bank to keep interest rates unchanged for the time being.

“Although any renewed political uncertainty could represent a headwind in the short-term, the picture appears to be gradually improving for the UK real estate market.”