Energy efficient upgrades now an essential home feature
Savers with student loans put away £2k less per year towards a house deposit than those without
- 44 per cent of those with student loans say the debt makes it harder to be financially stable, with 41 per cent saying their repayments make it harder to save for a home
- Barclays Mortgage data shows the share of first-time buyers purchasing below the stamp duty threshold rose 7.6 per cent year-on-year in February, as they save on costs
- Energy efficiency of homes is a growing concern following recent shocks to oil prices, with 56 per cent now saying home upgrades are essential not optional
- Homeowners increasingly unlock value from their homes to make renovations, with additional borrowing on an existing mortgage hitting its highest share of completions in 12 months in February
- Barclays Property Insights analyses proprietary mortgage data alongside consumer research to uncover the key trends shaping the UK housing market
Barclays Property Insights reveals that current and prospective homeowners feel squeezed by external costs such as student loan repayments and energy bills. 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. Additionally, though most homeowners will remain on their current deals, many are considering their options following increases in fixed-rate mortgage rates throughout the market.
Student debt is increasingly on consumers’ minds as they manage their household budgets, with 44 per cent of student loan holders saying their repayments limit their ability to build long-term financial stability. Despite high repayments, a third (32 per cent) 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 per cent) of graduates with student debt say it is preventing them from entering the housing market. This comes as over four in 10 (43 per cent) 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 £310.00 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 per cent of first-time buyer purchases in February 2026, compared with 60.9 per cent 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 the Middle East, 82 per cent of UK adults are concerned that the tensions could lead to rising oil, gas and fuel prices. Meanwhile, over half of homeowners (56 per cent) 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 £26,323.80 on average. As a result, half of homeowners (49 per cent) 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 per cent 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 per cent 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 per cent of Gen X agree. This comes as first-time buyer demand remains focused on ‘forever homes’ which can stand the test of time, and lifestyle changes. Barclays Mortgage data finds over the last 12 months, semi-detached or detached houses accounted for nearly half of first-time buyer purchases (48.8 per cent), compared to just 18.2 per cent for flats.
Borrowing to build
Amid the rising cost of renovations, homeowners are looking for ways to raise funds from their existing assets. Barclays Mortgage data shows that additional borrowing on an existing mortgage (also known as ‘Further Advance’) made up 11.7 per cent of mortgage completions in February, the highest proportion in 12 months.
Meanwhile, three in 10 mortgage holders (30 per cent) say they have either recently increased, or plan to increase, their borrowing as part of a remortgage. Over a fifth (22 per cent) have released or plan to release equity from their home. For those who say they have raised funds through such methods in the past 5 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 per cent. Other motivations include funding a large purchase at 17 per cent and supporting a family member at 15 per cent.
Rate reactions
The knock-on impact of the Middle East conflict has led to a rise in fixed-term mortgage rates in recent weeks throughout the market. As a result, 37 per cent of homeowners on fixed-rate deals think it likely that their mortgage costs could increase in the next few months1. However, for many this could be determined by how long the volatility lasts – just 1 per cent of mortgage holders report their deal is expiring within the next month, rising to 8 per cent within the next 3 months. Meanwhile, two-fifths of mortgage holders (43 per cent) say they feel financially resilient. Comparatively, 54 per cent of homeowners who own outright report financial resilience, whereas just 31 per cent 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.
“Homeowners are understandably concerned about rising fixed-rates across the market, but it’s important to remember that there are options available. You can typically lock in a new rate 90 days before your end of term date with your existing lender – or up to six months out if you are looking at moving lenders. This can provide peace of mind for those who want to protect themselves against short-term volatility, whilst planning ahead.”
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