Graduates with student loans save nearly £2,000 less per year towards house deposits than debt-free savers, with 41 percent saying repayments are preventing them from entering the housing market, according to new research from Barclays.
The bank’s Property Insights report found those with student debt save £310 a month towards deposits, compared with £473.70 for those without – a gap of £1,964.40 annually. The findings suggest rental demand from young professionals may remain structurally higher as homeownership stays out of reach for longer.
Meanwhile, 56 percent of homeowners now consider energy efficiency upgrades essential rather than optional, with additional borrowing hitting its highest share of mortgage completions in 12 months as owners tap equity to fund renovations.
First-time buyers target cheaper homes
To reduce upfront costs, first-time buyers are increasingly purchasing below the stamp duty threshold. Barclays mortgage data shows properties under £300,000 represented 68.5 percent of first-time buyer purchases in February 2026, up from 60.9 percent a year earlier – a rise of 7.6 percentage points.
Jatin Patel, head of mortgages, savings and insurance at Barclays, said rising external costs are reshaping how the UK approaches homeownership. “Student loan repayments are slowing deposit saving for many aspiring buyers, while volatile energy prices are forcing households to think much harder about the long-term running costs of their homes,” he said.
For landlords, the shift to cheaper properties could intensify competition in traditionally buy-to-let price brackets below £300,000.
Energy upgrades drive additional borrowing
Following Middle East tensions and oil price shocks, 82 percent of UK adults are concerned about rising energy costs. This is driving a surge in home improvement spending, with additional borrowing on existing mortgages hitting 11.7 percent of Barclays completions in February.
This follows Landlord Knowledge’s report on Greater Manchester’s £30,000 EPC grants through the Good Landlord Charter. The latest figures suggest homeowners are also increasingly willing to invest in efficiency improvements.
Recent or upcoming renovators estimate total costs at £26,324 on average. Home improvement was the top reason for additional borrowing at 40 percent, ahead of funding large purchases at 17 percent and supporting family members at 15 percent.
Half would pay premium to avoid renovations
The high upfront cost of energy upgrades is changing buyer behaviour. Half of homeowners surveyed said they would prefer to buy a new or recently renovated property to avoid spending on upgrades themselves.
Younger buyers are even more focused on future-proofing. The research found 52 percent of Gen Z would pay a premium for a new build rather than buy a cheaper older property with costly renovations later, compared with just 37 percent of Gen X.
For landlords considering sales, properties with completed EPC improvements may attract premium prices from buyers seeking to avoid renovation costs and uncertainty.
Rate volatility prompts caution
The knock-on impact of Middle East conflict has led to fixed-rate mortgage rises across the market. Some 37 percent of homeowners on fixed deals think their costs could increase in coming months.
However, Patel noted homeowners can typically lock in new rates 90 days before their deal ends with existing lenders, or up to six months out when switching. “This can provide peace of mind for those who want to protect themselves against short-term volatility, whilst planning ahead,” he said.
What this means for landlords
- If you’re targeting the sub-£300k market: Expect increased first-time buyer competition as graduates try to minimise stamp duty while managing student debt repayments.
- Watch for: Tenant demand from young professionals likely to stay elevated as the £2,000 annual savings gap delays homeownership for graduates.
- Bottom line: Properties with completed energy upgrades may command premiums from buyers seeking to avoid £26,000 renovation costs.
Editor’s view
The £163 monthly savings gap between graduates and debt-free savers adds up to years of delayed homeownership. For landlords, this extends the rental runway for professional tenants – but the stampede into sub-£300k properties signals fiercer competition when buying in that bracket.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 23 March 2026
Sources: Barclays Property Insights, Opinium Research
Related reading: Greater Manchester offers landlords up to £30,000 EPC grants through Good Landlord Charter
