The Locked Gate Generation: Gen Z and the Collapse of Housing Access

At 25, your parents might have been putting down a deposit. At 25 today, you’re lucky if you can move out of your childhood bedroom. In 2025, the average Gen Z adult in the UK faces a housing market that feels increasingly like a locked door and no one left them the key.

Gen Z is being priced out of both renting and buying. A major reason is the widening gap between income growth and housing costs. According to Cushman & Wakefield, Gen Z has 86% less purchasing power than baby boomers did in their twenties. That means for every £1 a boomer earned, Gen Z gets just 14p in real spending power. At the same time, UK house prices have surged. In London, the average home now costs £668,680, while the national average is £269,000, which is nearly nine times the average graduate salary let alone living wage. Renting isn’t much better. The average private rental housing price in England rose by 6.1% in a single year, with London increased by 6.9%, according to the ONS. This isn’t just a cost-of-living issue. It’s a generational squeeze that limits mobility, delays family planning, and widens inequality.

Data from the Royal Institution of Chartered Surveyors (RICS) shows that housing activity is picking up, with a net balance of +3% in new buyer interest as of July 2025. A “net balance” refers to the percentage of surveyors reporting increases minus those reporting decreases, so a positive figure suggests growing demand. But this is not necessarily good news for Gen Z. Rising demand, without enough new supply, just pushes prices higher.

There’s a disconnect between what’s available and what people can afford. A rise in “zombie listings” homes that remain unsold for months but are repeatedly relisted at the same price creates the illusion of supply without improving access. According to Nationwide, average house prices are rising again (up 0.6% month-on-month) but these price tags don’t reflect affordability for first-time buyers. Meanwhile, the rental market is under intense pressure. RICS reports that landlord instructions fell by 21%, meaning fewer properties are entering the rental pool. This drives up competition and leaves renters vulnerable. Even though tenant demand is stable, the shrinking supply of rental properties is intensifying competition. This points to a supply-driven squeeze rather than a demand surge, with 24% of surveyors now expecting rents to rise further in the next three months.

Households are already feeling the pressure of rising housing costs. Barclays reports that renters are spending 30.8% of their income on rent, compared to 26.6% for homeowners. Ideally, housing costs should not exceed one-third of income, a threshold that’s being breached across the board. Worse still, only 12% of renters say they plan to buy a home within the next year, down from 31% in January. This collapse in buyer confidence shows just how broken the pathway to ownership has become.

Moreover, the housing crisis isn’t just a young person’s problem, it’s an economic drag. When young professionals can’t afford to live near jobs, productivity falls. When families delay homeownership, they also delay consumption tied to stability like furnishing homes, starting families, or building equity. For landlords, rising interest rates and new regulations are prompting some to exit the market. That leaves fewer options for renters and pushes up prices further. Employers are feeling it too. In high-cost areas like London or Manchester, companies are struggling to attract junior talent, especially in essential sectors like education and healthcare, where salaries don’t stretch far enough.

Jonathan Hopper, CEO of Garrington Property Finders, warns that current house listings are “not new stock, but old listings reborn,” meaning that apparent improvements in supply don’t translate into accessibility. Moreover, while RICS describes the market as entering a ‘stable phase’, this stability masks deeper structural affordability issues, particularly for new entrants.

In contrast, some can argue that Gen Z has unrealistic expectations, that they want to live in the city or buy without compromise, however, homes in less popular areas are becoming unaffordable for full-time workers earning an average salary. But this overlooks a larger issue: even modest properties in non-central areas are now out of reach. The government’s target to build 300,000 new homes per year looks good on paper, but delays caused by underfunded regulatory bodies like the Building Safety Regulator are slowing delivery. Another complexity is supply-side inflation. Construction materials, labour shortages, and high interest rates have pushed developers to delay projects or focus on luxury housing, further reducing options for first-time buyers.

Looking forward, housing policies must shift from asset-based models to affordability-based ones. That means accelerating planning approvals, investing in build-to-rent schemes, and expanding shared ownership programmes. Financial institutions also have a role to play, by offering more flexible mortgage models tied to wage growth rather than fixed income thresholds. And universities could be incentivised to build more student and graduate housing that eases transition into the workforce. If not addressed, this will become a permanent economic handicap, regressing to lower productivity, slower household formation, and greater wealth inequality.

In conclusion, the housing market for Gen Z is less a ladder and more a locked gate. With deposits growing faster than wages, rents taking up larger portions of income, and limited housing options in both price and availability, the idea of owning a home is becoming less common and more conditional. While the market may appear stable on the surface, stability doesn’t mean accessibility. This isn’t just a crisis of affordability it’s a collapse of the social contract between generations. If this continues, housing won’t be a milestone of adulthood, it will be a dividing line between economic inclusion and exclusion.