Current and prospective homeowners feel squeezed by external costs such as student loan repayments and energy bills, the latest Barclays research shows.
In response, buyers and owners alike are seeking cost efficiencies. First-time buyers are purchasing cheaper homes to save on stamp duty, whilst homeowners are spending more on energy upgrades now, to pay less on bills in the future.
Student debt is increasingly on consumers’ minds as they manage their household budgets, with 44% of student loan holders saying their repayments limit their ability to build long-term financial stability. Despite high repayments, a third (32%) of loan holders do not expect to ever repay the debt in full. This ongoing cost pressure is felt keenly by prospective homeowners – two-fifths (41%) of graduates with student debt say it is preventing them from entering the housing market. This comes as over four in 10 (43%) renters report the cost of deposits as the biggest barrier to homeownership.
For those actively building up a house deposit, there is a savings gap between those with student loans and those without. Individuals who have outstanding student debt report putting away £310 per month towards a deposit, whereas those without a loan say they save £473.70 per month, an extra £163.70. Over the course of a year, this puts debt-free individuals £1,964.40 closer to their savings goal than individuals who have a student loan.
To combat pressures on their savings, many first-time buyers are trying to reduce their upfront costs elsewhere, by targeting homes below the stamp duty threshold. Barclays Mortgage data shows that properties under £300,000 represented 68.5% of first-time buyer purchases in February 2026, compared with 60.9% in February 2025.
Energy efficiency upgrades now essential, not optional
Alongside student loan burdens, energy costs are a growing consideration for both renters and homeowners. Following the outbreak of conflict in West Asia, 82% of UK adults are concerned that the tensions could lead to rising oil, gas and fuel prices. Meanwhile, over half of homeowners (56%) say that energy efficiency upgrades are becoming essential rather than optional because of high utility costs.
However, there is a high upfront price tag, with recent or upcoming renovators estimating the total cost to be over £26,000 on average. As a result, half of homeowners (49%) would prefer to buy a new or already recently renovated property to avoid spending on upgrades. Homeowners aren’t just focused on short-term outlays, with 47% concerned about the costs of fixing up their property as it ages.
Younger people are even more cognisant about the efficiency of their property in the long term. 52% of Gen Z say they would pay a premium to purchase a new build now, rather than buy a cheaper older property with costly renovations later down the line. In comparison, just 37% of Gen X agree. This comes as first-time buyer demand remains focused on ‘forever homes’ which can stand the test of time. Barclays data finds over the last 12 months, semi-detached or detached houses accounted for nearly half of first-time buyer purchases (48.8%), compared to just 18.2% for flats.
Amid the rising cost of renovations, homeowners are looking for ways to raise funds from their existing assets. Barclays data shows that additional borrowing on an existing mortgage made up 11.7% of mortgage completions in February, the highest proportion in 12 months.
Meanwhile, three in 10 mortgage holders (30%) say they have either recently increased, or plan to increase, their borrowing as part of a remortgage, while over a fifth (22%) have released or plan to release equity from their home. For those who say they have raised funds through such methods in the past five years, the average amount borrowed or planned to be released is £47,524. Home improvement is the main reason cited for increasing borrowing at 40%. Other motivations include funding a large purchase at 17% and supporting a family member at 15%.
Homeowners brace for potential mortgage rate increases
The knock-on impact of Iran war has led to a rise in fixed-term mortgage rates in recent weeks throughout the market. As a result, 37% of homeowners on fixed rate deals think it likely that their mortgage costs could increase in the next few months. However, for many this could be determined by how long the volatility lasts – just 1% of mortgage holders report their deal is expiring within the next month, rising to 8% within the next three months.
Meanwhile, two-fifths of mortgage holders (43%) say they feel financially resilient. Comparatively, 54% of homeowners who own outright report financial resilience, whereas just 31% of renters agree.
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. With homeowners unlocking value in their property for upgrades, we’re seeing a clear shift towards investing now to improve future financial resilience."
