85% of Gen Zs want to own a home despite deposit barrier – Pepper Money
Over a quarter of millennials not on the housing ladder did not think they would ever be able to buy, compared to just 8% of Gen Zs.
Homeownership remained a strong ambition for most Gen Zs, with 85% hoping to buy a home at some point, according to Pepper Money’s latest Specialist Lending Study.
Many did not understand mortgage requirements, had lower financial resilience, and lacked confidence in the application process.
Over a quarter of millennials not on the housing ladder did not think they would ever be able to buy, compared to just 8% of Gen Zs.
Saving for a deposit was a major challenge.
The average UK adult had £13,200 in savings, just over a fifth of the average first-time buyer (FTB) deposit of £61,900.
Only 15% saved more than £500 each month.
Nearly half of Gen Zs who managed to buy reported help from family.
The study also found 1.2 million UK adults expected to be in a position to buy their first home within the next year, with 1.5 million in the next 1-2 years, 1.8 million in 2-3 years, and 2.2 million in 3-5 years.
Additionally, data showed that 47% of potential homebuyers with adverse credit said they would speak to a mortgage broker for advice on getting a mortgage.
The study also found that 9.26 million people (17%) have experienced adverse credit in the last three years.
Paul Adams, sales director at Pepper Money, said: “Zero-deposit mortgages can seem like a quick way onto the property ladder, especially for first-time buyers struggling to save.
“But the reality is these products come with higher interest rates, fewer lender options, and a far greater risk of financial strain if the market fluctuates.
“In contrast, a 10–25% deposit reduces monthly repayments, gives access to better mortgage deals, and provides a buffer against negative equity.”
Adams added: “Buyers need to carefully weigh the immediate benefit of getting a home now against the long-term financial stability and flexibility that a traditional deposit offers.
“For many, patience in saving a deposit can be a safer, more sustainable path to homeownership.
“Whether opting for a 0% deposit mortgage or a more traditional product, it’s crucial to remember that a mortgage is a legally binding contract.”
He said: “Failure to repay can result in the lender repossessing the property, so careful consideration is encouraged ahead of committing.
“First-time buyers should research thoroughly and seek advice from a mortgage broker or independent financial advisor who can help them navigate the mortgage process to best suit their needs.”
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