Consumer spending on mortgage and rent rose 4.5% annually in September, picking up from a 17-month low in August, data from a bank revealed.
The Barclays Property Insights data analysing the behaviour of its customers found that this occurred as the Bank of England’s Monetary Policy Committee (MPC) decided to hold the base rate at 5%.
Elsewhere, spending on utilities dropped by 12.5%, which Barclays said was a “welcome sign” before the increase to Ofgem’s energy price cap came in on 1 October. It said the rise in average energy prices meant the lower spending on these bills was “unlikely to persist as winter approaches”.
Consumer confidence held steady at 70% month-on-month, despite the expected rise in both housing and energy costs, Barclays said.
Similarly, there was no increase in the proportion of consumers who felt unconfident about making their rent and mortgage payments, which stayed at 15%.
The bank attributed this to steadied interest rates.
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Mark Arnold, head of mortgages and savings at Barclays, said: “While consumer costs continue to be impacted by the ongoing volatility in the housing market, we are still encouraged by the long-term downward trajectory of rent and mortgage spending.
“The next MPC decision in November will certainly be one to watch, although we recognise that there are multiple complex issues impacting the housing market beyond just interest rates, including supply and demand pressures. I hope we can work alongside government and industry to tackle some of these over the coming months.”
