70% of London Adults Want to Buy a Home, Yet Most Struggle with Costs, Deposits, and Financial Stress

According to Pepper Money’s Specialist Lending Study 2025/26, homeownership remains a strong ambition in London, with 70% of adults wanting to buy a home—the highest level of aspiration in the UK. Yet economic concerns weigh heavily on prospective buyers, with 61% worried about their financial situation due to the UK economy, again the highest in the country.

The study, based on a nationally representative survey of over 4,000 UK adults, highlights a region where high homeownership aspirations sit alongside significant financial strain, revealing a clear advice gap as many buyers struggle to turn ambition into action.

Nationally, demand for homeownership remains resilient: more than 1.2 million UK adults expect to be in a financial position to buy their first home within the next 12 months, while 30% have experienced adverse credit at some point – the highest figure recorded to date. Gen Z are the most aspirational, with 85% hoping to own a home in the future.

Confidence, however, remains fragile. Seventeen per cent of UK adults describe the mortgage process as daunting, rising to 28% among those with adverse credit. Nearly one in ten prospective buyers fear they may be declined due to their credit score.

In London, misconceptions around deposits and affordability remain a major barrier. 73% of Londoners either don’t know or believe they’d need at least a 15% deposit to buy a home, causing many to disengage before seeking advice. Savings habits further compound the challenge, with 70% saying a £100 increase in monthly bills would significantly impact them, the highest in the UK.

Financial pressures are also taking a human toll. Adults in London are more likely than any other region to have missed a payment at some point, and 38% say money worries are affecting their mental health, again the highest in the country. In this context, confidence-building, affordability-led advice is essential to help buyers navigate decisions at a pace that works for them.

Speaking to a broker is a crucial step in the homebuying journey. In London, 27% of adults with adverse credit prefer a fee-charging broker, trusting the independence and quality of the advice they provide. Broker-led conversations can challenge misconceptions, rebuild confidence, and re-engage buyers who might otherwise feel homeownership is out of reach. Yet awareness remains limited, meaning many prospective buyers are missing out on this support.

The regional insights for London were revealed at Specialist Lending Study Live – South on Wednesday, 28th January, with brokers from the local area in attendance. A panel discussion between Rob Barnard, Intermediary Relationship Director at Pepper Money, Richard Howes, Managing Director of Mortgages at Paradigm Mortgage Services, and Tommy Taylor, Chapter Managing Director at Spicerhaart, on the findings helped to bring to light some of the opportunities for brokers in 2026, and where misconceptions need to continue to be dispelled.

Paul Adams, Sales Director at Pepper Money, said:” Londoners have the strongest ambition to own a home in the UK, but that ambition is being held back by intense financial pressure, deposit misconceptions, and concerns about affordability. With many worried about their financial situation and a higher incidence of missed payments, mortgage brokers can play a vital role in providing trusted, independent advice and access to specialist lenders, helping buyers navigate complexity and move forward with greater confidence.”

Richard Howes, Managing Director of Mortgages at Paradigm Mortgage Services, said: “The Pepper Specialist Lending Study again shows the size of the specialist lending market and provides valuable insight for mortgage brokers looking to work in it or indeed complements the work brokers are already doing in this area. The most significant insight I have taken is that specialist lending is no longer a niche but a fundamental part of the mortgage landscape, with more and more people needing the help of a broker and a specialist lender. With adverse credit affecting one in three adults and financial complexity rising, there’s a growing cohort that requires consistent lending policies to suit their needs. The challenges around complex lending are not going away; if anything is growing according to the survey. Importantly, this area of the mortgage market wants to work with consumers and mortgage brokers to offer meaningful solutions by working in partnership to broaden access to homeownership”.

Tommy Taylor, Chapter Managing Director at Spicerhaart, said: “Homeownership remains the top ambition for Londoners, but the reality of deposits, affordability, and financial pressures is leaving many feeling stuck. This ambition is being translated to a busier property market, but misconceptions could be holding would-be homeowners back, like thinking a 15% deposit is always required. Independent, tailored advice is key: it helps people understand what’s realistically achievable, rebuild confidence, and take the steps toward owning a home at a pace that suits them. With financial pressures so high, starting the conversation early can make all the difference.”