Soaring rents and stagnant wages are locking Gen Z out of homeownership, as average deposits climb to record highs and families step in to bridge the gap.
Housing crisis deepens for young buyers
Gen Z homebuyers are being “locked out” of the property market as deposits soar to levels nearly double the average annual salary, campaigners have warned. Rising rents, combined with stagnant wage growth, are leaving many unable to save, despite cutting back on everyday spending.
An analysis of property, rental and salary data shows that while the average homebuyer in 1995 needed just £5,000 — about a third of their annual wage — for a deposit, today’s buyers must find around £61,000, more than ten times as much.
The average house price in England has surged to £286,594, up from £50,679 three decades ago. By contrast, salaries have only risen from £15,034 to £37,430 over the same period, leaving younger generations facing unprecedented affordability challenges.
Rents climbing faster than incomes
Rents have jumped 31% in just five years, climbing from £1,025 to £1,343 a month. Ben Twomey, chief executive of Generation Rent, warned: “Generation Z is Generation Rent. They are locked out of home ownership because they face higher rent costs than any other generation before them. Trying to save for a deposit to buy a home while rents soar is like pushing a boulder up a hill that keeps getting steeper and steeper.”
Young renters like Paris, 26, from London, say sacrifices have become unavoidable. “It’s giving up your entire social life,” she said. “My mum asks me, ‘What do you do, you just stay in all the time?’ And I say, ‘Well yeah, because we can’t afford it!’”
Experts say conditions tougher than ever
Even industry professionals admit the challenge is greater now than in previous decades. Ben Thompson, deputy CEO of the Mortgage Advice Bureau, recalled buying his first home at 22 with a near-100% loan. “I think it’s tougher to buy today than it was before,” he told The Independent.
Chris Foye, housing economist at University College London, said advising Gen Z to “just save more” was not realistic. “There’s only so much we can tell young people about investing wisely when they don’t have very much to invest in the first place,” he explained.
A widening wealth divide
The gap between those who can rely on family support and those who cannot is widening. Data from Savills shows over half of first-time buyers received financial help from relatives last year, with contributions totalling £9.6bn.
Without such support, many risk being lifelong renters. Over 30 years, renters could spend as much as £483,000 without gaining the security of owning a home, according to calculations based on ONS data.
Government pledges reform
The Labour government has pledged to deliver 1.5 million new homes and has set aside £39bn for affordable housing. A spokesperson for the Ministry of Housing said: “The acute and entrenched housing crisis this government inherited has seen a generation locked out of homeownership and paying a record rent bill. That is why our Plan for Change set out steps to get Britain building and deliver 1.5 million homes, while tackling excessive rent demands.”
Measures also include the Renters’ Rights Bill, which will end “no-fault” evictions and strengthen tenant protections.
Gen Z fights back
Despite the odds, some are pushing through. Paris recently saved £14,000 for a small flat in southeast London after years of sacrifices. Others, like Luke, 24, are taking riskier routes: “Truthfully, I think the only solution to [large deposits] is some high-risk, high-return way like crypto. The British population almost don’t have a choice.”
Campaigners argue, however, that without systemic reform, Gen Z could remain “trapped renting” for decades to come.
