A third (33.5%) of first-time buyers (FTBs) opted for semi-detached homes in August, as more young people looked for ‘forever homes’, according to Barclays Property Insights.
The research found buyers also went for longer mortgage terms to keep monthly payments down.
Confidence in the market picked up slightly to 29% in August from a six-month low of 26% in July.
Three-bedroom houses were the top pick, making up 46% of purchases in August.
Millennial buyers, aged 28 to 43, were most likely to go for extra space, with 22% buying homes with more bedrooms than they needed.
This compared to 13% across all age groups.
Semi-detached houses made up 33.5% of FTB purchases, up 1.7% on last year.
Flats dropped in popularity, falling 2.7% to 19.6% of first-time buyer sales.
33% of Gen Z buyers, aged 18 to 27, said they bought a ‘forever home’ so they wouldn’t have to move.
Just under three in 10 buyers (27%) said they planned to stay in their new home for at least 10 years.
Nearly half (49%) of Gen X, aged 44 to 59, and 40% of Millennials wanted a garden or outdoor space.
For Gen Z, this was less important at 32%, but they were more likely to look for a dedicated work from home space at 28%, compared to 20% of Millennials and 9% of Gen X.
Among FTBs, 41.3% took out loans over 30 years.
Almost four in 10 mortgage holders (37%) preferred 30-40 year terms for lower monthly payments.
The average borrower reported mortgage payments took up 27.7% of their take-home pay in August, up from 26.6% in July.
But 53% were cautious about longer loans, worried it could leave them financially vulnerable later.
This was strongest among Millennials at 60%.
Spending on mortgages and rent grew 4.4% year-on-year in August, down from 5.2% in July.
22% of renters believed owning a home was possible within five years, up from 16% in July.
Additionally, data found that 47% saw high prices as the main barrier to buying, up from 38% the month before.
Over three-fifths of renters (61%) had seen or expected an increase in housing costs this year, leading 40% to review their budgets, 43% to cut back on small luxuries, and 27% to spend less on holidays.
Jatin Patel, head of mortgages, savings and insurance at Barclays, said: “Our data shows that first-time buyers are not considering property merely to get a ‘foot on the ladder’ but for the long term.
“Whether it’s to create space for a growing family, or to invest for the future, it’s encouraging to see young people feel slightly more confident in taking this significant step.
“It’s clear that buyers are still cost-conscious as 30+ year mortgage terms become more popular – this option helps consumers reduce their payments by stretching their borrowing over a longer period of time.”
Julien Lafargue, chief market strategist at Barclays Private Bank and Wealth Management, said: “Despite facing challenges, the UK economy continues to demonstrate resilience.
“Our data shows that a period of caution is emerging, with over half of businesses delaying investment decisions until after the Autumn Budget, and consumers are also taking a ‘wait and see’ approach as they anticipate any changes that may lie ahead.
“However, looking beyond the immediate horizon, the combination of economic factors such as moderating inflation, and a more accommodative stance from the Bank of England should provide a supportive backdrop for the housing market.”
Lafargue added: “These considerations may help sustain demand and improve affordability, even as broader economic uncertainty lingers.“
