Data from Barclays Property Insights shows that rent and mortgage spending grew 4.3 per cent year-on-year in June, marking the fourth month that growth has slowed, as major lenders continue to lower mortgage rates. Spending on utilities increased just 1.2 per cent due to the recent heatwave, with further easing on the way thanks to last week’s price cap decrease.

Key Findings:

• Consumer spending on rent and mortgages grew 4.3 per cent in June, slightly below the 4.6 per cent recorded in May

• Confidence in the UK housing market fell 3 points to 27 per cent as the Base Rate was held at 4.25 per cent

• Renters saving for a deposit hope to accrue over £30,000 in under five years, on average, although few are currently on track to meet their target

• Half of renters believe homeownership is unattainable without financial incentives and buyer support schemes, but awareness of available support is low

• Barclays’ Property Insights combines data from across the Bank with consumer research to provide in-depth analysis of UK housing trends

Consumer confidence in the UK housing market fell 3 points to 27 per cent, as the Bank of England maintained the Base Rate at 4.25 per cent. Offsetting this, concerns around the barriers to home ownership are easing – four in 10 (39 per cent) consumers cited property prices as one of the major barriers in June (down 6 points from May) and 19 per cent cited monthly mortgage payments (down 3 points), as major lenders continue to lower mortgage rates.

Government-backed ownership schemes face awareness challenges

Half (53 per cent) of renters believe homeownership would be impossible without the help of financial incentives and homebuying support schemes. Despite this, awareness of the government-backed Shared Ownership initiative is relatively low. Three in 10 (31 per cent) consumers haven’t heard of the scheme, with the figure even higher among 18–34-year-olds (39 per cent).

However, those familiar with the scheme see the benefits. A third (34 per cent) believe Shared Ownership offers a more affordable route to getting on the property ladder compared to a traditional mortgage, and one in five (19 per cent) believe that these types of initiatives offer a solution for first-time buyers struggling to get on the housing ladder.

Ready, set, save

A fifth (22 per cent) of renters are currently saving for a house deposit, with this group aiming to accrue just over £30,000 (£30,347.40) in 4.8 years, on average, from the time they started saving.

To meet this target, over £500 per month (£526.86) would need to be saved, on average, not accounting for interest or inflation. However, renters are putting away less than half the monthly goal (£230.80 per month on average1), suggesting the target timeline could be over-optimistic for many without a change in financial circumstances.

Later-life renters welcome flexibility

Across all age groups, nearly half (49 per cent) of tenants believe it is more expensive to be a renter than a mortgage-payer, and renters are nearly three times more likely to say they struggle with their housing costs compared to homeowners (25 per cent vs 9 per cent).

However, not all renters are looking to get onto the property ladder for the first time – a fifth (22 per cent) report having previously owned a home, including four in 10 (40 per cent) ‘later-life’ renters over the age of 55. This is perhaps because renters aged 55+ are more likely to say they prefer renting as it offers more flexibility for their current life stage (56 per cent vs national average of 40 per cent).

Jatin Patel, Head of Mortgages, Savings and Insurance at Barclays, said: “Our latest insights reflect a housing market in transition. While lower mortgage rates are providing some relief, affordability remains a challenge."

“Our findings underscore the importance of tailored solutions to address the diverse needs of today’s prospective homeowners. While half of renters view homeownership as unattainable without financial support schemes, there remains a significant gap in awareness of initiatives like Shared Ownership, particularly among younger adults."

“Bridging this knowledge gap is crucial to empowering first-time buyers and fostering greater accessibility to the property market.”

Will Hobbs, Managing Director, Barclays Private Bank and Wealth Management, said: “Data on the economy are telling a particularly incoherent story at the moment. We maintain that the starting point for the UK’s economy is better than widely acknowledged. Household balance sheets are more robust in aggregate and the corporate sector is potentially well placed to benefit from the incoming industrial revolution in machine learning and generative AI."

"The news of the world around us remains unsettling, but it is important to remember that the economy is capable of dancing to a quite different tune. Blind optimism ultimately outperforms sober pessimism when it comes to the economy over longer periods of time, primarily because the march of technological change.”