The latest Barclays Property Insights report reveals increased mortgage and rent spending, but consumer confidence remains strong.
- Mortgage and rent spending rose by 6.4% in October, the highest since September 2023, yet confidence among consumers is at a yearly high.
- Despite fears over interest rates, 55% of Brits are confident in meeting monthly housing costs, an increase from previous months.
- Energy prices and household bills remain a concern, yet utility spending fell by 13% year-on-year, indicating cautious optimism.
- Property prices and deposit costs continue to be barriers to homeownership, especially among younger demographics, with concerns over rental increases.
According to the latest Barclays Property Insights, expenditure on rent and mortgages surged by 6.4% in October, marking the highest rate since the previous year. Despite this, consumer confidence in managing these costs has not only endured but increased, reaching its peak this year. This demonstrates a resilient mindset among the population even as financial burdens grow.
An intriguing aspect of this report is the rise in consumer confidence. More than half of the population, about 55%, now express confidence in their ability to manage monthly rental or mortgage payments, an increase from 53% in September. This positivity prevails in spite of continuous apprehension regarding rising interest rates, which has slightly decreased from 63% in June to 60% recently.
Energy expenditure has become a focal point for many households as worries about the energy price cap increase persist, unsettling 79% of Brits. However, there’s a silver lining—spending on utilities has dropped by 13% compared to the previous year, reflecting a measure of optimism as prices remain below 2023 levels.
The challenges to homeownership are apparent, with 69% of renters viewing property prices as the primary obstacle, followed closely by the financial burden of deposits. These hurdles are particularly pronounced in younger age groups, with nearly half of those aged 18-34 optimistic about owning a home within the next five years, compared to only 28% of individuals aged 35-54 sharing this view.
Renters have been hit by increased payments, with 32% experiencing a rise in rent over the past year, a factor contributing to difficulties in saving for home purchases. Relocation trends reveal that 18% of Brits are planning a move, with financial savings being the major driver. Urban environments remain the most attractive to those currently living rent-free with friends or family.
Home improvement interest persists despite a 7.7% reduction in spending from the previous year. A significant portion of the population (44%) is considering renovation or redecoration, with intentions split between enhancing their living environment and increasing property value for future sales. Aesthetic preferences continue to influence market perceptions, with certain design features proving unpopular with potential buyers.
Mark Arnold, head of mortgages and savings, points out, ‘The housing market can be fickle, with trends and macro-economic factors directly impacting monthly expenses. Yet, consumer confidence is a key driver for current market dynamics. Even with interest rates potentially dropping, expanding market capacity to mitigate financial barriers is crucial as we approach 2025.’
The UK housing market shows resilience and optimism despite financial challenges, indicating a stable foundation for future growth.
