"Our data shows that first-time buyers are not considering property merely to get a 'foot on the ladder' but for the long term"
- Jatin Patel - Barclays
New data from Barclays Property Insights shows that semi-detached properties are now the most common choice for first-time buyers, as younger households increasingly focus on securing ‘forever homes’. At the same time, cost concerns are encouraging many to take out longer mortgage terms, with confidence in the housing market showing a slight recovery.
Barclays mortgage figures reveal that semi-detached homes accounted for 33.5% of first-time buyer purchases in August, an increase of 1.7% on the year. Flats fell in popularity by 2.7%, representing 19.6% of first-time buyer purchases.
Three-bedroom properties remain the most in demand, making up 46% of all purchases in August. Millennials, aged 28 to 43, are the age group most likely to buy with extra space in mind, with 22% purchasing a home with more bedrooms than needed, compared with 13% across all age groups.
A third (33%) of recent Gen Z buyers, aged 18 to 27, said they chose a ‘forever home’ to avoid moving again. Across all buyers, 27% intend to remain in their new property for at least ten years.
Lifestyle priorities also vary by age group. Nearly half (49%) of Gen X homeowners, aged 44 to 59, and 40% of Millennials say outdoor space is a top priority. In contrast, only 32% of Gen Z place the same importance on a garden, but 28% want a dedicated space to work from home, compared with 20% of Millennials and 9% of Gen X.
Borrowers opt for longer mortgage terms
Barclays data shows that 41.3% of first-time buyers are choosing mortgage terms of 30 years or more. These options are especially popular among younger borrowers, who have more time to repay loans.
Among mortgage holders more broadly, 37% view 30–40-year terms as more desirable because they reduce monthly repayments. At the same time, 41% believe mortgage payments take up too much of their income. On average, homeowners reported payments accounting for 27.7% of take-home pay in August, up from 26.6% in July.
Despite the appeal of lower monthly costs, 53% of homeowners remain concerned about extending loan terms, as they feel it could leave them financially vulnerable later in life. This concern is highest among Millennials, at 60%.
Confidence rises but affordability challenges remain
Spending on mortgages and rent grew 4.4% year-on-year in August, slowing from 5.2% in July after the Bank of England’s base rate cut. Confidence in the housing market rose to 29%, up from 26% in July, though affordability remains a concern.
A fifth (22%) of renters believe they could buy within five years, up from 16% in July and the highest figure since February. However, 47% cite record-high house prices as the main barrier, compared with 38% a month earlier.
Three-fifths (61%) of renters have seen, or expect to see, housing costs rise this year. To cope, 40% are reassessing budgets, 43% are cutting back on non-essential purchases, and 27% are reducing holiday spending.
“Our data shows that first-time buyers are not considering property merely to get a 'foot on the ladder' but for the long term. Whether it’s to create space for a growing family, or to invest for the future, it’s encouraging to see young people feel slightly more confident in taking this significant step,” said Jatin Patel, head of mortgages, savings and insurance at Barclays. “It’s clear that buyers are still cost-conscious as 30+ year mortgage terms become more popular - this option helps consumers reduce their payments by stretching their borrowing over a longer period of time.”
“Despite facing challenges, the UK economy continues to demonstrate resilience,” said Julien Lafargue, chief market strategist at Barclays Private Bank and Wealth Management. “Our data shows that a period of caution is emerging, with over half of businesses delaying investment decisions until after the Autumn Budget, and consumers are also taking a ‘wait and see’ approach as they anticipate any changes that may lie ahead.
“However, looking beyond the immediate horizon, the combination of economic factors such as moderating inflation and a more accommodative stance from the Bank of England should provide a supportive backdrop for the housing market. These considerations may help sustain demand and improve affordability, even as broader economic uncertainty lingers.“
