Student loan repayments are cutting into house deposit savings leaving aspiring buyers almost £2,000 a year worse off than those without debt, research from Barclays reveals.
The bank’s latest Property Insights report found buyers with student loans save an average of £310 per month towards a deposit.
Those without debt save £473.70. That leaves borrowers £163.70 behind each month. Over a year, the gap reaches £1,964.40.
The pressure comes as housing costs, energy bills and mortgage rates continue to rise. Many first-time buyers are now targeting cheaper homes to reduce upfront costs.
STUDENT DEBT
Barclays data shows properties under £300,000 made up 68.5% of first-time buyer purchases in February 2026. A year earlier, the figure was 60.9%.
Student debt is a major factor.
Just under half (44%) of loan holders say repayments limit their ability to build long-term financial stability. Meanwhile some 41% say student debt is stopping them entering the housing market while 43% of renters say the deposit is the biggest barrier to buying.
Energy costs are also changing buying decisions with more than half (56%) of homeowners say efficiency upgrades are now essential.
The average cost of improvements is estimated at £26,323.80. Many buyers now prefer newer or renovated homes to avoid upgrade costs. And younger buyers are also most focused on long-term efficiency.
Just over half (52%) of Gen Z would pay more for a new build rather than renovate later.
HOMEOWNERSHIP CHALLENGE
Jatin Patel (main picture, inset), Head of Mortgages, Savings and Insurance at Barclays, says: “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.
“Homeowners are understandably concerned about rising fixed-rates across the market, but it’s important to remember that there are options available.”
