According to the Council of Mortgage Lenders (CML), an increase in the number and amount of student loans means lenders will need to increase their flexibility to encourage younger buyers onto the property ladder.
Young people are leaving university with higher average debts than ever before, leading the CML to call for changes in the way lenders deal with first-time buyers (FTBs).
"For today's young adults, mobility for career and other reasons is an important factor," said Bob Pannell, head of research at the CML.
"While home-ownership remains a long-term aspiration for the majority, the reality is that for many young people the combination of house prices and student debt is reinforcing a lifestyle choice in favour of renting."
Mr Pannell confirmed that the CML was always "exploring new ways of getting first-time buyers onto the property ladder" and that the launch of shared equity loans as part of the Open Market Homebuy scheme, to be launched in October, would help.
"We hope this can be a platform for a more flexible approach and we urge the government to work with lenders to develop innovative ways of helping young people who want to buy their own home."To read more about loans, click here.
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