Barclays: Rent and mortgage spending reaches 14-month high
Rent and mortgage spending reaches 14-month high, as over half of Brits worry about the impact of rising rent or mortgage costs
Growth in rent and mortgage spending increased 8.2% year-on-year last month, reaching a 14-month high, according to the latest Barclays Property Insights report.
When asked about their household expenses, four in 10 Brits (41%) report being very concerned about rising household bills, with over half (56%) also worried about the impact of rising rent or mortgage costs.
Barclays Property Insights also reveals that nearly a quarter (23%) of homeowners state that the cost of Stamp Duty is the biggest barrier to buying their next home. This tax is even more significant for younger homeowners, at 39% of 18–34-year-olds, compared to 15% of over 55s.
Key outputs from the embargoed Barclays Property Insights report show that:
- Nearly half of Brits (46%) are adjusting their spending habits to offset rising costs, with a third (32%) saying they are looking for ways to save money on their rent or mortgage.
- Three in 10 (30%) said they were cutting back on holidays to save cash, with a similar proportion investing in order to build their housing fund.
- A quarter of Brits (25%) are making improvements to their home to increase its energy efficiency, with half of this group (52%) seeking to reduce long-term energy use and a fifth (19%) hope to improve the value of their property.
Green home renovations a priority to help improve energy efficiency as housing costs rise in November
- Rent and mortgage spending grew 8.2 per cent year-on-year in November, as more homeowners rolled off fixed-rate mortgages onto higher interest rates
- Brits are looking to improve their home’s energy efficiency, with loft insulation, wall insulation, double or triple glazing, and fitting solar panels topping retrofitting priorities
- Changes to stamp duty are causing concerns for next-time buyers, however renters still report house prices as the biggest barrier to buying a home
- Barclays Property Insights combines data and research from across the Bank to give an in-depth perspective on emerging housing trends in the UK
Rent and mortgage spending increased 8.2 per cent year-on-year last month, reaching a 14-month high, according to the latest Barclays Property Insights report. Despite increased costs, consumers have maintained confidence in their ability to afford housing payments, though stamp duty changes have hampered plans for some next-time buyers. Meanwhile, improving home energy efficiency remains a priority for the winter months ahead.
Concerns around rising interest rates dropped slightly to 59 per cent in November, down from a high of 63 per cent in June 2024, following the Bank of England’s decision to reduce the base rate to 4.75 per cent earlier in the month.
When asked about their household expenses, four in 10 Brits (41 per cent) reported being very concerned about rising household bills, with over half (56 per cent) also somewhat worried about the impact of rising rent or mortgage costs.
Meanwhile, two fifths of Brits (41 per cent) are adjusting their spending habits to offset rising housing costs, with a third (29 per cent) saying they are looking for ways to save money on their rent or mortgage.
Energised by energy saving
Spending on utilities was down -10.6 per cent year-on-year in November, as prices remain below 2023 levels. However, this is the smallest decrease since July 2024, reflecting the energy price cap rise which came into effect on 1 October and the arrival of colder weather.
Meanwhile, a quarter of homeowners (25 per cent) are making improvements to their home to increase its energy efficiency. Of those making changes over half (52 per cent) are seeking to reduce long-term energy use and a fifth (19 per cent) hope to improve the value of their property.
The most popular improvements are loft insulation (48 per cent), wall insulation (37 per cent), double or triple glazing (35 per cent), and fitting solar panels (33 per cent).
Some homeowners are also reluctant to shoulder the financial burden of retrofitting, with 69 per cent of those identified as ‘able to pay’ saying the Government should fund retrofitting activities, with a further two-thirds (67 per cent) believing the Government needs to take action to change how the nation heats or cools its homes.
In the report, Barclays makes five recommendations to Government to help tackle the structural and behavioural barriers to retrofitting. These include convening a Retrofitting Delivery Authority to address implementation challenges and supporting strategic cross-sector collaboration.
Purchasing dreams not ‘stamped’ out
Nearly a quarter (23 per cent) of homeowners state that the cost of Stamp Duty is the biggest barrier to buying their next home. This tax is even more significant for younger homeowners, at 39 per cent of 18–34-year-olds, compared to 15 per cent of over 55s.
Amongst renters, only 7 per cent say that the recent changes to Stamp Duty in the Chancellor’s October budget will delay their home-buying aspirations, although this rises to 27 per cent in London. In contrast, almost two thirds (64 per cent) agree that property prices are the biggest barrier to buying a home.
For renters taking steps to save up for their housing deposit, trying to reduce monthly bills is most popular (37 per cent), alongside reducing discretionary spending (37 per cent). Three in 10 (30 per cent) said they were cutting back on holidays to save cash, with a similar proportion investing in order to build their housing fund.
Brits rein in seasonal decorations
With Christmas fast approaching, sustainability and budgeting are front of mind, as two fifths of those who celebrate Christmas (42 per cent) are choosing to reuse decorations over buying new, and 24 per cent of those trying for a more sustainable Christmas are opting for LED light bulbs.
Over half (51 per cent) are choosing to forgo buying a Christmas tree or decorations this year; with the average celebrator intending to spend £33.30 decking the halls, compared to £204.20 on presents, £51 on festive parties and socialising, and £41.90 on travel to see friends and family.
Renters were more likely to opt out of spending on seasonal interiors (56 per cent), but also reported limitations in their ability to decorate, with over one in 10 (12 per cent), saying that their housing situation prevents them decorating for the festive season in the way they’d like to.
Mark Arnold, Head of Mortgages and Savings at Barclays, said: “The rise in rent and mortgage spending dampens some of the optimism felt following the recent drop in interest rates. For mortgage holders coming to the end of fixed rate deals set in or before 2022, they will only now be feeling the impact of the interim rate volatility. These effects are then being passed through to the rental sector, through higher rents and reduction in supply.
“We are seeing some positive news with homeowners interested in retrofitting measures, which has the dual effect of benefitting both the environment as well as consumers’ back pockets. However, there remains more to be done to build awareness and understanding of the options available. This is where we see the Government being able to play a key role, helping to bring together the public and private sectors to collectively harness consumer interest and help accelerate efforts to make UK homes more energy efficient.”
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