Over half of Gen Z trust AI for homebuying advice

Getting that first foot on the property ladder is an incredibly exciting time, but it can also be daunting, with complex terminology to navigate and big decisions to make.

New research reveals ‘digital natives’ Gen Z and Millennials are getting increasingly creative, using tech to tackle first-time buyer challenges a little differently.

According to new research from Lloyds, more than a third (37%) of all homebuyers trust AI to provide valuable guidance during the homebuying and renovation process.
 

But faith in the ‘estate aigent’ climbs further among younger buyers, with 59% of 18 to 24-year-olds and 61% of 25 to 34-year-olds embracing the tech as a powerful ally in the homebuying process.

“The younger generation’s tech-savviness is driving a new wave of AI-assisted homeowners,” says Lloyds Money Expert, Ola Majekodunmi. “While AI can offer inspiration and useful information to help speed up the homebuying process, it’s important to remember that not everything it serves up will be accurate. That’s why we always recommend speaking to a qualified professional to ensure decisions are based on sound advice.”

A first-time buyer’s friend

“Today’s first-time buyers are perfectly placed to make the most of digital tech and tools that weren’t available to the previous generation of homeowners,” adds Ola. “As a result, from budgeting and saving to jargon busting, AI has become first-time buyers’ go-to tool for simplifying the complexities of home ownership.”
In fact, almost 4 in 5 first-time buyers, whether they’re actively searching for their first home or already part way through the process, have embraced AI to help with a variety of tasks, as they navigate the homebuying process. Some of the top uses include:

Neighbourhood research

Researching the right location is critical for any buyer, especially for those who may be considering buying in a new neighbourhood. AI platforms can compile insights about schools, job opportunities, transport links and even noise levels – so it’s no surprise that 43% of first-time buyers are already using, or would consider using, the tech to explore and compare potential neighbourhoods before deciding where to move.

Translating legal jargon

The language used in contracts and legal paperwork throughout the house buying process can sometimes be difficult to navigate, especially for first-time buyers who haven’t been through it before. As a result, 50% of first-time buyers now view AI as a valuable tool for breaking down complex legal documents into digestible and easy-to-understand formats.

Cost estimation

From building up a deposit to budgeting for legal fees, knowing how much money is needed to get onto the property ladder can be a difficult task for first-time buyers. To help, 57% of first-time buyers are open to using AI tools to support with cost estimations, so they can get more clarity on what they need to save, before they complete their purchases.

A helping hand, not a crystal ball

“With AI tools now accessible to anyone with a smartphone or laptop, it’s not entirely surprising that first-time buyers are embracing the tech as part of the homebuying process,” adds Ola. “This could be the start of a new approach to homebuying, where AI is helping young people to feel independent, empowered and confident to make the right choices for them.”

What’s important, however, is while younger generations are increasingly asking AI for help, the research also shows they’re not necessarily taking the information it provides as fact.

Over half (55%) of 18 to 24-year-olds and almost two-thirds (65%) of 25 to 34-year-olds said they would get a second opinion on any recommendations made by the technology.

Ola shares her top tips to guide those considering using AI in the homebuying process:

1. Double check the details
   AI is great at pulling together information, but when the stakes are high, it’s always important to check in with a human expert too. Be sure to check any legal, financial or property-specific advice with a qualified professional – whether that’s your solicitor or a mortgage advisor, for example. You can also check verified sources like GOV.UK, to make sure your decisions won’t end up costing you down the road.
2. Avoid sharing personal information
   You want to keep your private life private. When using AI in the homebuying process, try to avoid feeding it personal or financial information, such as your bank account details, as AI can store the data it’s given to train future responses.
3. Use AI for inspiration rather than advice
   If AI has you dreaming of knocking down walls or building your dream kitchen, make sure to check planning and building regulations with a professional before picking up your hammer. Knowing what’s possible before you buy will save you a world of potential headaches further down the line. It’s also important to verify any of the tech’s DIY-advice with a professional or trusted source.

“There’s no denying that AI has become a useful tool in our everyday lives and naturally that’s extended into the homebuying process,” says Ola. “But it’s important to remember, while it can help to simplify jargon, compare property prices or trends and estimate costs, there are limits to the quality and credibility of the information and advice it gives.

“It’s always important to talk to qualified professionals, like your bank, mortgage brokers, solicitors or financial advisors, who can provide credible advice to smooth the process of buying your first home.”