Barclays has reported that semi-detached properties accounted for 33.5 percent of first-time buyer purchases in August, indicating a shift among young buyers toward homes they intend to keep long-term. The bank’s data also shows that four in ten first-time buyers are choosing mortgages with terms longer than 30 years to help manage monthly payments.
Three-bedroom homes remain the most popular choice, making up 46.4 percent of all purchases last month. Millennials, aged 28 to 43, are more likely than other age groups to buy properties with extra bedrooms for future needs, with 22 percent doing so compared to 13 percent across all ages.
Flats have become less popular among first-time buyers, dropping by 2.7 percentage points and now representing just under a fifth of such purchases. In contrast, over a third of Gen Z buyers (aged 18 to 27) said they purchased a ‘forever home’ to avoid moving again.
When it comes to property features, priorities differ by generation. Nearly half of Gen X homeowners and 40 percent of Millennials value gardens or outdoor space, while only about a third of Gen Z feel the same way. However, Gen Z is more likely than older generations to want dedicated work-from-home spaces.
The trend toward longer mortgage terms continues as buyers seek ways to reduce monthly costs. Barclays found that among its first-time buyer customers, mortgages exceeding 30 years now account for over 41 percent of new loans. Thirty-seven percent of mortgage holders prefer these longer terms due to lower monthly repayments, though more than half express concern about financial vulnerability later in life if loan durations are extended.
Mortgage and rent spending increased by 4.4 percent year-on-year in August but was down from July’s growth rate following the Bank of England’s base rate reduction (https://www.bankofengland.co.uk/monetary-policy/the-interest-rate-bank-rate). Confidence in the housing market improved slightly from July’s six-month low, rising three percentage points to reach 29 percent.
Despite some positive signs, concerns about affordability persist. Sixty percent of respondents remain worried about rising housing costs. Almost half cite high house prices as a major barrier to ownership—a figure that has grown since July—and three-fifths report increasing or expected increases in their housing expenses this year.
To cope with these pressures, many renters are reviewing budgets and cutting back on discretionary spending such as holidays and small luxuries.
Jatin Patel, Head of Mortgages, Savings and Insurance at Barclays, said: “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.
“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."
Julien Lafargue, Chief Market Strategist at Barclays Private Bank and Wealth Management, said: “Despite facing challenges, the UK economy continues to demonstrate resilience. 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.“
For further information about Barclays’ products or research findings visit their website at https://home.barclays/.