Gen Z is defying the doom narrative, with new data showing younger buyers are gearing up to get on the ladder in 2026
You’d be forgiven for thinking Gen Z had given up on owning a home. Years of rapid house price growth, high mortgage rates and sticky rental costs have all fed a narrative of a “lost” generation locked out of the market.
Yet fresh data from Barclays’ latest Property Insights report suggests something very different: Gen Z is not only engaged, but quietly confident – and increasingly prepared – to buy in 2026.
Barclays’ research shows that a third of Gen Z adults (34%) hope to purchase a new or first home this year, more than double the national average of 16%. Confidence in the housing market among 18–34-year-olds has also improved, rising from 33% in January 2025 to 40% in December, even as affordability pressures remain intense.
For brokers, that mix of optimism and realism – backed by hard saving and growing comfort with higher-LTV borrowing – is likely to define the first-time buyer market over the next 12 months.
Optimism meets hard reality
Gen Z’s confidence is not blind. Younger buyers are acutely aware that affordability remains the key challenge.
Nearly two-thirds (64%) of young prospective buyers still cite high house prices as a barrier, while 61% say mortgage rates now have a bigger impact on affordability than prices themselves. At the same time, Gen Z is leaning into the problem rather than walking away from it.
Almost six in 10 (59%) Gen Z buyers planning to purchase in 2026 have already saved what they consider a significant amount towards a deposit. On average, they have built up £19,442 from their own resources – excluding assistance or inheritance – compared with £25,760 among all hopeful buyers. They also expect to add almost £9,000 more over the course of the year.
Jatin Patel, Head of Mortgages, Savings and Insurance at Barclays, told Mortgage Introducer that this combination of easing fundamentals and determined saving is underpinning Gen Z’s cautiously upbeat outlook – but warns that the interest rate path will be pivotal.
“Encouragingly, affordability has improved somewhat in the UK, with recent market insights showing average house price to income ratios have come down,” he explained. “However, looking to the year ahead, if Bank of England rate cuts turn out to be slower or smaller than expected, the hope of lower monthly payments could be muted and dampen these affordability gains.”
Patel notes that while Gen Z is watching rate moves closely, their biggest structural challenge remains the deposit – and that’s where product design and advice can make a tangible difference.
“Whilst prospective buyers are concerned about mortgage rates, the cost of deposits and property prices remain the biggest barriers to getting on the ladder. Therefore, ongoing awareness and adoption of the products which help address deposit concerns will be essential to help Gen Z buyers remain optimistic about their homeownership goals.”
Smaller deposits, higher LTVs – a new entry route
The data suggests that traditional barriers are beginning to ease at the margin.
Across the market, deposits below £20,000 accounted for 22% of first-time buyer purchases in December 2025, up from 13% a year earlier, while the average first-time buyer deposit fell by 14% year-on-year. At the same time, there has been a clear shift towards higher loan-to-value borrowing: 44% of first-time buyers took out 85–90% LTV mortgages in December, up from 41% the previous year.
For Gen Z, that willingness to trade a bigger mortgage for a smaller up-front deposit is increasingly the critical lever in turning aspiration into action.
“High-LTV lending plays an important role in widening access to home ownership, and we are seeing a greater willingness among first-time buyers opting for higher LTV mortgages as a way of overcoming the challenges of saving for a deposit,” said Patel.
He acknowledges the obvious concern – that borrowers with thinner equity cushions are more exposed if prices stall or fall – but argues that the post-2008 framework has transformed the risk profile of higher-LTV lending.
“There are understandable some concerns that borrowers have less equity to absorb price fluctuations, so a period of flat or falling house prices would leave some more exposed than others. The system, however, has much stronger and more robust safeguards than in the past.
“Affordability testing remains comprehensive, and borrowers are rigorously stress-tested against higher rates. While we do not see signs of systemic risk building at present, responsible underwriting and realistic expectations are crucial to ensuring higher-LTV lending remains sustainable.”
For intermediaries, that line between access and overreach will be central in 2026: helping Gen Z leverage higher LTVs to bridge the deposit gap, while ensuring budgets remain resilient if rates don’t fall as quickly as many hope.
Bank of Mum and Dad: still important, but not decisive everywhere
The report also points to a subtle but important shift in attitudes towards family support.
The Bank of Mum and Dad remains influential – supporting around a third (34%) of recent Gen Z buyers – but perceptions of how essential that support is are easing. At the start of 2025, almost two-thirds (63%) of Gen Z said inheritance or financial assistance was essential; by late 2025, that had fallen to 43%.
Patel says the picture is far from uniform across the UK.
“Family support continues to be a factor in helping younger buyers onto the property ladder, particularly when it comes to raising a deposit, although we have seen perceptions of this necessity improve. However, despite the growth of higher-LTV products, the reality is that saving even a modest deposit can be challenging alongside rent and everyday living costs.
“The reliance on the Bank of Mum and Dad is not uniform across the country. In lower-priced regions, such as the North West, buyers are more likely to make the transition with limited or no family help, with only one in five owners (19%) saying they had received support towards a purchase, whereas in London and the South East this rises to roughly three in 10 (30% and 29% respectively).”
For brokers, this suggests a more nuanced Gen Z client base: in some regions, the focus will be on maximising borrowing capacity for solo savers; in higher-priced markets, structuring gifted deposits and family-assisted solutions will remain a core part of the advice conversation.
What brokers should be telling Gen Z now
While Barclays highlights a looming remortgaging wave for existing borrowers, Patel stresses that proactive preparation is just as relevant for tomorrow’s first-time buyers as it is for those coming off deals.
On the remortgage side, he says borrowers coming off five-year fixed deals in 2026 is a key area of focus, as many will have locked in rates during a very different interest-rate environment.
Even with some recent easing in mortgage pricing, it is inevitable that some will still face higher monthly payments, so he strongly encourages customers to engage early with either their mortgage provider or a broker – ideally six to nine months before their deal ends – to understand their options.
Reviewing household budgets, building up savings buffers where possible, and seeking advice on product transfers or remortgaging can all make a meaningful difference.
The same principles apply to Gen Z would-be buyers. Early engagement with a broker can help them pin down realistic price ranges and deposit goals, and stress-testing their finances against a slower or shallower path of rate cuts can ensure plans remain robust. Carefully exploring higher-LTV options, and weighing the benefit of getting on the ladder sooner against the need for resilience if rates or costs move against them, should sit alongside building an emergency fund and being clear about what lifestyle adjustments might be necessary if affordability does not improve as quickly as hoped.
A generation that still believes – with conditions
For all the headwinds, the overarching message is that Gen Z has not written off homeownership. If anything, this cohort appears more determined – and better informed – than many assume.
Affordability is still tight, and the path of interest rates in 2026 will be critical. But with smaller deposits becoming more common, higher-LTV borrowing embedded within a stricter regulatory framework, and a growing share of young adults actively saving and planning, brokers can expect Gen Z demand to remain a defining feature of the market in the year ahead.
