Student debt hinders home ownership

A new report by Barclays has highlighted how student loans significantly impact graduates’ ability to save for home deposits.

The study reveals that individuals with student debt save £310 monthly, while those without save £473.70 creating a £1,963.70 gap annually. Additionally, 44% of loan holders feel repayments hinder their financial stability, and 41% believe it prevents them from entering the housing market.

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. Repayments also affect the financial stability of nearly half of graduates.

Graduates typically benefit from an earnings premium over their non-university educated peers. However, the gap has narrowed significantly over recent decades.

Latest dats shows thatthe average annual salary of £42,000 for graduates and £30,500 for non-graduates. The average student loan debt in England has also risen to £53,000, reflecting changes to the system and rises in tuition fees.

Barclays said that many first-time buyers appeared to be attempting to reduce their house-buying costs elsewhere, including by increasingly targeting homes below the stamp duty threshold. It said its findings were based on two surveys of 2,000 consumers by Opinium Research.

The report shows that 68.5% of first-time buyer purchases in February 2026 were for properties priced under £300,000, compared with 60.9% in February 2025.

Jatin Patel, Head of Mortgages, Savings and Insurance at Barclays, said “Rising external costs are reshaping how the UK approaches home ownership. 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.”