Rising debt and shrinking job prospects are making the path to homeownership even tougher for young buyers
The latest S&P Global Consumer Sentiment data shows borrowing rose in nearly every age group in February. The most notable increase came from those aged 18 to 24, while borrowing among 25 to 34-year-olds remained largely flat.
The figures suggest mounting financial strain among Gen Z, many of whom continue to face an uncertain jobs market. Unemployment among 16 to 24-year-olds climbed to 15.3% in the three months to September, and OECD data indicates the UK’s youth jobless rate has overtaken the European Union average for the first time since comparable records began in 2000.
For mortgage advisers, rising unsecured borrowing paired with weaker employment prospects presents a familiar but growing challenge. Saving for deposits, maintaining strong credit profiles and meeting affordability checks may become even more difficult for aspiring first-time buyers.
Policy and technology linked to youth employment pressures
Catherine Mann, an external member of the Bank of England’s Monetary Policy Committee, has pointed to government policy as a major contributor to the rise in youth unemployment. Speaking to the Telegraph, she argued that significant minimum wage increases introduced by previous and current governments have translated into reduced hiring among younger workers as businesses absorb higher wage costs.
Fresh labour market figures from the Office for National Statistics are expected shortly, with economists forecasting the overall unemployment rate to edge up from 5.1% to 5.2%.
Growing anxiety as credit conditions tighten
S&P’s research highlights rising concern about personal debt. Maryam Baluch, economist at S&P Global Market Intelligence, noted that households are becoming more uneasy about borrowing, particularly as access to loans has fallen at the fastest pace since August 2024.
Confidence in the labour market has also weakened, dropping to its lowest point since June 2025. Survey responses indicate households are increasingly pessimistic about job security and future earnings.
For intermediaries, this may mean more detailed affordability assessments and greater emphasis on helping clients stabilise their finances before they are ready to apply for a mortgage.
Big purchases increasingly postponed
Financial pressures and uncertainty are already influencing spending behaviour. Many households are delaying major purchases and cutting back on discretionary spending. Confidence in making large purchases, such as household appliances, has fallen to a 10-month low.
While reduced spending could help some households regain financial stability, it may also dampen housing market activity — particularly among those planning to buy their first home or move up the property ladder.
Savings fall as households rely on reserves
Alongside higher borrowing, savings and available cash have declined across the UK. The East Midlands recorded the sharpest drop, with households increasingly drawing on reserves to cover everyday costs.
For prospective first-time buyers, reduced savings capacity makes building a deposit more difficult and could increase reliance on higher loan-to-value mortgages, family support or alternative homeownership routes.
