Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.
Affordability Now Outweighs Location for Gen Z Buyers
Barclays’ latest Property Insights data reveals that affordability has overtaken location as the most important factor for Gen Z homebuyers. Nearly a quarter (24%) of Gen Z buyers now cite price as their top consideration, ahead of location (19%) and neighbourhood quality or safety (17%).
The report highlights that many young buyers are unable to afford homes in their preferred areas. A quarter (25%) of Gen Z renters say they cannot buy in their desired location, leading to increased willingness to compromise. More than one in five (21%) Gen Z buyers are prepared to compromise on location, and nearly one in five would consider moving more than 25 miles away from their preferred area to secure an affordable property.
Changing Buyer Behaviour and Market Trends
Barclays’ research indicates a shift in buyer behaviour, with Gen Z showing greater flexibility about where they live compared to older generations. While baby boomers are more likely to compromise on property condition, younger buyers are more willing to give up their ideal location or outdoor space for affordability. Around one in seven (14%) Gen Z adults have already reduced their housing budget or lowered their expectations about the type of property they can buy.
Despite affordability challenges, demand from Gen Z remains strong. The proportion of Gen Z renters actively looking to buy increased from 9% in April to 16% in May. The report also notes that the average deposit required for a home purchase fell by 16.4% year-on-year to £57,209, with London seeing a 27.2% drop to £136,057. Deposits also fell in the South East and East Anglia, while changes in the North and North West were minimal. Northern Ireland saw a 14.9% increase in average deposits.
Transaction Delays and Remortgaging Activity
Barclays found that nearly nine in ten buyers and sellers (88%) experienced delays during their transaction, and almost a third (29%) saw a sale fall through before completion. Remortgaging activity has also risen, with remortgages accounting for 40.6% of completions, up from 30.7% a year earlier.
Consumer confidence in the housing market has improved to 26%, but affordability remains the main obstacle. Over a third (37%) of respondents say saving for a deposit is their biggest concern, while 36% cite high house prices as the main barrier.
Source: Mortgage Strategy