Rent and mortgage spending grew by 6.4% in October, the highest rate of growth recorded since September 2023, according to the latest Barclays Property Insights report.
Despite this increase, consumers displayed their highest level of confidence in the UK housing market this year.
Barclays found more than half (55%) of the population are confident they can afford their monthly rental or mortgage outgoings, an increase compared to September (53%).
The Barclays Property Insights report combines data and research from across the bank to give an in-depth perspective on emerging housing trends in the UK.
Researchers found concerns around rising interest rates remained steady at 60%, down from a high of 63% in June 2024, following the Bank of England’s decision to hold the base rate at 5% in September.
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Rising energy bills
When asked about their household expenses, eight in 10 (79%) of those surveyed were concerned about the rise in the energy price cap, with 42% also worried about the impact of rising household bills.
However, spending on utilities fell, down 13% year-on-year despite the energy price cap rise on 1 October, as prices are still below where they were in 2023.
However, the report’s authors pointed out that the price difference isn’t sufficient on its own to account for the double-digit drop in spending, suggesting that consumers are also being more frugal with their energy consumption this year.
The rental confidence conundrum
More than a quarter (26%) of renters reported having confidence in the UK housing market, while a fifth (21%) reported that the recent drop in inflation has made them more confident in their ability to afford their housing costs.
When asked ahead of the recent Budget, young renters were hopeful about their prospects, as nearly half of 18-34-year-olds said homeownership is within their reach within the next five years.
However, for older renters, this drops off, as only three in 10 (28%) of 35-54-year-olds think it will be possible in their lifetime.
Property prices are viewed as the biggest barrier to homeownership by seven in 10 (69%) renters, while 60% cited the cost of a deposit. Making matters more difficult, a third (32%) noted that their rental payments have increased over the past 12 months, impacting their ability to save for a property of their own.
More people relocating
A fifth (18%) of those questioned were considering relocating in the next year, with relocating most popular among 18-34-year-olds (33%). UK cities are leading the charge for a desired location (30%) over the countryside (23%) and coast (20%).
Those living rent-free with family, friends or a partner are more likely to want to move to a city or urban area (40%), likely indicative of young people saving money ahead of a move for work.
Renters are the most inclined to make a move to the countryside (28%), while owners are more likely to want to move to a city (31%). Of those considering relocation, one in seven (15%) are looking to move away from the UK completely.
For those wanting to relocate, saving money is stated as the primary reason (28%), followed by improving lifestyle or wellbeing (27%) and being closer to friends or family (21%).
Nearly a fifth (18%) of those wanting to relocate said their motivation was to downsize, with this rising to 37% among over-55s.
Home décor dealbreakers
Although overall spending on home improvements and DIY was down 7.7% compared to 2023, four in 10 (44%) of those surveyed reported that they are thinking about renovating or decorating their home in the near future.
More than a quarter (27%) are considering making improvements in order to improve the sale value of their property, while a fifth (20%) admitted concerns that they won’t be able to sell their property for what they believe it’s worth.
However, property updates don’t always have the desired effect for prospective buyers, as six in 10 (63%) of those surveyed reported having a housing design feature that turns them off a property.
Topping the list of property turn-offs is the re-emerging trend of avocado bathroom suites (27%), particularly unpopular among over-55s (35%). This is followed by shaggy carpets (17%) and textured wallpaper (17%).
Mark Arnold, head of mortgages and savings at Barclays, said: “The housing market can be fickle, with housing trends and macroeconomic factors having a direct impact on the monthly outgoings of millions of Brits. However, what truly drives the state of play is how confident consumers are feeling. Whether contemplating a relocation, purchasing a first home or redecorating, we can see that Brits have growing faith both in the housing market and in their ability to spend.
“Whilst spending on mortgages and rent has hit its highest level this year, so has consumers’ confidence in their homes. Even if interest rates fall as predicted, if this confidence is to be rewarded, more needs to be done to unlock greater capacity in the market to help drive down some of the financial barriers facing renters and homeowners as we look ahead to 2025.”
This article was first published on Mortgage Solutions‘ sister site, YourMoney.com. Read: Brits spending more on rent and mortgage payments
