The lender’s latest Property Insights data shows that almost a quarter (24%) of Gen Z buyers say price is the most important factor when choosing a home. This ranks above location (19%) and neighbourhood quality or safety (17%).

However, many young buyers are struggling to afford homes where they would ideally like to live. A quarter (25%) of Gen Z renters say they cannot afford to buy in their preferred area.

As a result, many are making compromises. More than one in five (21%) Gen Z buyers say they are willing to compromise on location, while nearly one in five would consider moving more than 25 miles away from their preferred area in order to buy a home they can afford.

The research highlights a growing shift in buyer behaviour, with younger people becoming more flexible about where they live in order to achieve homeownership.

Compared with older generations, Gen Z buyers are making different trade-offs. While baby boomers are more likely to compromise on the condition of a property, younger buyers are more willing to give up their ideal location or outdoor space if it means securing a more affordable home.

Affordability pressures are also causing some young people to rethink their expectations. Around one in seven (14%) Gen Z adults say they have already reduced their housing budget or lowered their expectations about the type of property they can buy.

Despite these challenges, demand remains strong. The proportion of Gen Z renters actively looking to buy a home rose from 9% in April to 16% in May, suggesting that while affordability remains a challenge, it is not reducing interest in homeownership.

There are signs that some barriers to buying are beginning to ease.

The average deposit fell by 16.4% year-on-year to £57,209, helped by slower house price growth and increased use of higher loan-to-value mortgages.

London saw one of the biggest declines, with average deposits falling by 27.2% to £136,057. Deposits also fell sharply in the South East (-22.8%) and East Anglia (-23.5%).

In other regions, changes were smaller. Deposits were broadly unchanged in the North (+0.8%) and North West (-0.5%), while Northern Ireland recorded a 14.9% increase.

Nearly nine in ten buyers and sellers (88%) reported experiencing delays during their transaction, while almost a third (29%) saw a sale fall through before completion.

At the same time, remortgaging activity has increased significantly. Remortgages accounted for 40.6% of completions, up from 30.7% a year earlier, as homeowners continue to review their borrowing arrangements in a higher interest rate environment.

Consumer confidence in the housing market has improved, reaching 26%, but affordability remains the biggest obstacle for many would-be buyers.

More than a third (37%) say saving for a deposit is their biggest concern, while 36% cite high house prices as the main barrier.

Barclays chief market strategist Julien Lafargue said: “The interest rate environment remains challenging, with domestic political uncertainty compounded by ongoing geopolitical tensions in the Middle East. Even so, the UK economy continues to demonstrate resilience, suggesting that once these headwinds ease, conditions should improve.”