The latest findings from Barclays’ Property Insight report highlight a continuing affordability challenge for renters aspiring to become homeowners in the UK. Despite a slight reduction in average deposit requirements, high property prices and deposit costs remain significant barriers, particularly for younger buyers. This ongoing situation has important implications for landlords, letting agents and property professionals navigating the rental market and supporting tenants amid these pressures.
Affordability Remains a Key Obstacle for Renters
Barclays’ recent data reveals that the cost of deposits and elevated property prices continue to restrict many renters from transitioning into homeownership. Although the average deposit amount decreased by 16.4% year-on-year in May 2026, it still represents the primary hurdle for prospective buyers. Specifically, 37% of renters identify the deposit cost as their main obstacle, closely followed by 36% citing high property prices. In contrast, only 16% consider monthly mortgage payments their biggest challenge.
This financial barrier is particularly pronounced among younger generations. For example, Generation Z prioritises price above all else when searching for a home, with 24% naming it their chief concern. To accommodate affordability, 21% of this group are willing to compromise on location, even if it means moving more than 25 miles away from their preferred area. Additionally, 14% of Gen Z adults have adjusted their budgets or lowered their housing expectations in response to these ongoing pressures.
Rising House Prices Compound Challenges for First-Time Buyers
The Office for National Statistics recently reported a 3.8% increase in UK house prices over the 12 months leading to April 2026, with the average property price reaching approximately £270,000. This upward trend further complicates the path to ownership for first-time buyers, who are already grappling with affordability constraints. Barclays’ head of mortgages, savings and insurance, Jatin Patel, notes that first-time buyers are increasingly adopting flexibility in their purchasing decisions, often making trade-offs on location or property features to enter the market.
Meanwhile, existing homeowners are responding to market volatility by securing mortgage rates earlier or adjusting their plans accordingly. These evolving behaviours contribute to a more complex housing market landscape, reflecting a determined consumer base seeking to manage their financial futures amid uncertainty.
Delays and Increased Complexity in Property Transactions
The research also indicates that delays and complications in property transactions have become more common. Approximately 88% of buyers and sellers surveyed this year reported experiencing delays during the purchase process, while nearly 29% have encountered a property purchase falling through. Economic volatility appears to be a significant factor, with 30% of consumers more likely to postpone buying or selling decisions as a precaution.
In response to these uncertainties, around one-third of consumers are either increasing their savings or reducing discretionary spending to mitigate potential future financial impacts. These trends suggest a cautious approach among both buyers and sellers, which could influence market activity and rental demand in the near term.
Implications for the Rental Market and Housing Supply
The persistent affordability issues for prospective buyers may lead to sustained or increased demand within the private rented sector, as more individuals delay or forgo homeownership. This dynamic places additional pressure on landlords and letting agents to manage rental properties effectively while responding to tenant needs. Furthermore, the willingness of younger renters to compromise on location may shift rental demand towards more affordable areas, influencing regional rental markets and investment strategies.
Landlords should be aware that tenants facing affordability challenges may require greater flexibility or support, including clear communication about tenancy terms and potential rent adjustments. Letting agents and property managers may also need to adapt marketing approaches and property offerings to align with shifting tenant priorities, particularly regarding affordability and location trade-offs.
What this means for landlords
Landlords should consider the ongoing affordability pressures faced by renters and prospective buyers when managing their rental portfolios. With many tenants potentially remaining in the rental market longer due to barriers to homeownership, maintaining good tenant relationships and ensuring properties meet tenant expectations is increasingly important. Flexibility around lease terms and responsiveness to tenant concerns can help retain reliable occupants in a competitive market.
Additionally, landlords may observe changes in rental demand patterns, including increased interest in properties located outside traditional prime areas. Understanding these shifts can inform investment decisions and property improvements to attract and retain tenants. Staying informed about market trends and regulatory developments, including the Renters’ Rights Act 2026, will also be crucial for compliance and effective property management.
What TLA members should consider
- Review rental pricing strategies to remain competitive in areas where tenants are prioritising affordability over location.
- Enhance communication with tenants about tenancy terms and potential support options to foster positive relationships and reduce turnover.
- Monitor regional market trends to identify emerging rental hotspots driven by affordability considerations among younger renters.
- Stay updated on relevant legislation, such as the Renters’ Rights Act 2026, to ensure compliance and protect both landlord and tenant interests (Renters’ Rights Act compliance pack).
- Consider flexible lease arrangements or incentives that may appeal to tenants facing financial constraints.
- Utilise TLA resources and training to remain informed about market conditions and best practices in property management (TLA Academy).
TLA Training Academy
The Landlord Association provides structured guidance, compliance education and practical support for landlords, letting agents and property professionals. Members can access training and resources designed to help them stay organised, informed and prepared.
Landlords can explore the Academy here: https://landlordassociation.org.uk/tla-academy/
Those looking to join and access member support can register here: https://landlordassociation.org.uk/get-started-with-the-landlord-association/
TLA update
The Landlord Association is continuing to expand its support, resources and partner network for landlords, tenants, agents and property professionals across the UK. Service providers interested in working with TLA can register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/
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