Generation Rent myth challenged by improving affordability data
New analysis suggests that homeownership prospects for Generation Z in England are better than widely believed, with affordability ratios improving and mortgage options expanding beyond London and the South East.
Claims that Generation Z, those aged 18 to 29, face permanent exclusion from homeownership due to high prices and rents are being questioned by recent data. According to Josh Endacott, a Gen Z estate agent at 1st Avenue, the narrative that young people will never own homes is misleading and risks becoming a self-fulfilling prophecy.
Endacott highlights that the typical house price to median earnings ratio in England has narrowed to 7.6 in 2025, the most favourable level since 2015. This shift has been driven by wages rising 25% since 2021, outpacing a 5% increase in median house prices. The improvement is not uniform, however, with London and the South East still exhibiting higher affordability ratios compared to regions such as the North East and the Midlands.
Affordability varies regionally and mortgage options evolve
While national average deposit requirements remain high, Endacott points out that these figures are skewed by London and the South East’s expensive markets. In many parts of the Midlands and the North, first-time buyer prices are below £200,000, and major lenders now offer mortgages with deposits as low as £5,000.
This regional variation means young buyers can consider expanding their search areas beyond their current locations, especially given the rise of remote and hybrid working. Earning a city salary while purchasing in a lower-cost town can make homeownership more attainable.
Government schemes also support this trend. The First Homes Scheme offers eligible buyers discounts of 30% to 50% on new-build homes, with price caps varying by location. Additionally, the Mortgage Guarantee Scheme, launched in July 2025, facilitates mortgages with loan-to-value ratios of 91% to 95%, enabling purchases with deposits as small as 5%.
Challenges remain for some but opportunities are growing
Endacott acknowledges that challenges persist, particularly in London and the South East, and for those without family financial support. Over half of first-time buyers still rely on assistance from relatives, which is not an option for everyone. This inequality is significant and should not be overlooked.
Nevertheless, Barclays data shows that 34% of Generation Z are actively planning to buy a home in 2026, more than double the national average. Confidence among 18 to 34-year-olds in the housing market has also increased from 33% in January 2025 to 40% by December.
Regions such as Hyndburn in the North West report affordability ratios as low as 4.08, making homeownership more achievable on average salaries. These figures suggest that, contrary to popular belief, many young people are beginning to enter the property market rather than being trapped in a cycle of renting.
Implications for landlords and letting agents
For landlords and letting agents, these shifts in affordability and buyer behaviour may signal changes in rental demand patterns. As more Generation Z individuals transition to homeownership, rental portfolios in certain regions could experience reduced demand, particularly in lower-cost areas where affordability is improving.
Letting agents should monitor local market trends closely and consider advising landlords on potential impacts. Diversifying rental offerings or exploring opportunities in areas with sustained rental demand might become necessary. Additionally, understanding the nuances of government schemes and mortgage products can help agents guide prospective tenants who are also potential buyers.
What landlords and agents should consider now
- Review local market affordability data to anticipate shifts in tenant demographics and demand.
- Stay informed about government homeownership schemes and mortgage products that affect tenant decisions.
- Engage with tenants about their homeownership plans to better forecast portfolio needs.
- Consider the impact of remote working trends on tenant location preferences and property demand.
- Prepare for potential changes in rental turnover and adjust marketing strategies accordingly.
Supporting landlords through changing market conditions
The Landlord Association offers membership resources that can assist landlords and letting agents in adapting to evolving market dynamics. Through access to compliance information, property management tools, and practical guidance, members can better understand the implications of shifting affordability and buyer behaviour on their portfolios.
Our new property management and compliance platform, ORBIT, currently in BETA testing, is designed to help organise rental properties and portfolios, manage documentation, and record key actions such as tenant communications and inspections. While still developing, ORBIT aims to support landlords in maintaining compliance and responding effectively to market changes.
Explore TLA membership and learn more about ORBIT BETA access to stay informed and prepared as the rental sector continues to evolve.
Looking ahead, landlords and agents should remain vigilant to ongoing affordability trends and government policy updates. Understanding the changing aspirations and capabilities of younger generations will be essential for effective portfolio management and tenant engagement.
Sources: Landlord Today
TLA - The Landlord Association