Middle East Conflict Prompts Brits To Rethink Housing Plans

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Barclays Property Insights reveals that global and economic uncertainty is impacting how UK homeowners are managing their household finances. Almost one in five UK adults (17 per cent) say their housing plans have been affected by the conflict in the Middle East, with many taking action to protect against interest rate and cost‑of‑living pressures.

To safeguard against future rate rises, over a quarter of homeowners (27 per cent) say they are overpaying on their mortgage, and a fifth (20 per cent) of those remortgaging are looking to lock in a new rate as soon as possible in case of future volatility.

Early signs of this behaviour appear in Barclays’ mortgage data from March, which shows that the share of customers borrowing for a remortgage – compared to other reasons for borrowing, such as a first-time purchase or a home move – rose 9 percentage points year-on-year1.

However, it’s important to note that most of the remortgages completed were initiated prior to the escalation of the conflict in Iran, so this increase is more likely driven by the high numbers of people in the UK rolling off five-year fixed rates taken out during the low-interest rate environment in 2021.

Movers adapt to macroeconomic conditions

Existing homeowners cited a number of factors which could delay or prevent their next move. The top barrier was economic uncertainty, with three in 10 (29 per cent) saying this could change their plans. Other factors include stamp duty (27 per cent), moving fees (28 per cent), mortgage rates (24 per cent), and the price gap between their current home and available properties (24 per cent). Nearly half of adults in work (45 per cent) say their wages are not keeping pace with rising costs, so many may find it harder to take the next step up the ladder.

Facing these barriers, Barclays Mortgage data shows that existing homeowners increasingly gravitate towards cheaper properties and larger mortgages. The proportion of home purchases below £500,000 rose to 73.2 per cent year‑on‑year (up from 70.5 per cent in March 2025), while the share of next-time buyers putting down a deposit of less than £20,000 increased to 56.7 per cent from 43.2 per cent over the same period.

Second‑steppers face the largest financial leap on the housing ladder

Two-in five (41 per cent) UK homeowners say they are living in the first property they’ve ever owned, but moving up to the next rung of the property ladder can be challenging.

First-time owners looking to move to their next home – also known as ‘second-steppers’ – estimate needing to save an average of £75,648 to fund the purchase, on top of any proceeds from the sale of their current home. That figure breaks down into £41,751 for a deposit, £28,112 in stamp duty, and £5,785 in third‑party costs such as legal fees.

In contrast, third‑steppers and beyond – i.e. homeowners buying their third or subsequent primary residence – estimate needing to save just £52,651 on average. This includes £19,835 for a deposit, £26,860 for stamp duty, and £5,996 in third‑party costs.

That is £22,998 less than second‑steppers, reflecting the greater equity this group has typically built up in their current home. Over two in five (43 per cent) of those further along the property ladder say they would not need to save anything for a deposit at all.

Jatin Patel, Head of Mortgages, Savings and Insurance at Barclays, said:

“Periods of geopolitical and economic uncertainty inevitably place greater focus on household finances, and we’re seeing homeowners and potential buyers respond in pragmatic ways. Borrowers are demonstrating resilience by overpaying where they can, reassessing their mortgage options, and thinking carefully about timing to maintain flexibility and control."

“For those moving from their first to their second primary residence, the challenge is more structural. Buyers at this stage often face the widest gap between properties, while still needing to fund deposits, stamp duty and moving costs largely from savings rather than equity alone. That makes second‑steppers particularly sensitive to economic pressures, even as they take considered steps to keep their housing plans on track.”

Barclays has solutions for homeowners at every stage of the property ladder, from Mortgage Boost for first-time buyers, or additional borrowing if customers need to fund a large purchase, renovation, or to consolidate debt. Find out more here.

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Jan 9, 2025
3 min read

Small businesses are increasing their financial resilience in the face of increasing costs based on the latest analysis of personal guarantee backed loan applications by Purbeck Insurance Services – the UK’s only provider of personal guarantee insurance.

Key Facts:

Demand for Personal Guarantee Insurance (PGI) for small business loans jumps 45% in 2024 vs 2023
Average personal guarantee backed small business loan rises 9% to £174k in Q4 2024 from £159k in Q4 2023
1 in 5 (22%) loans in Q4 2024 were for investment or a business acquisition
Most loans are for working capital (33%) to keep a business going
50% year on year rise in start-ups seeking personal guarantee backed loans
Value of loans to start-ups up 21% year on year

Demand For Finance Strongest In Start-Ups

In the final quarter of 2024, there was a 25% increase in small businesses applying for personal guarantee backed business loans compared to the same quarter of 2023. Indeed, for the whole of 2024 there was a 45% increase in small businesses taking on personal guarantee backed finance. This shows how personal guarantees have become a standard requirement in small business lending.

Underlining the increased level of entrepreneurship in the UK[i], 50% more start-ups (firms that have been established for under 2 years) applied for funding in Q4 2024 and the average loan to these young businesses jumped from £100,399 in Q4 2023 to £121,668 in Q4 2024 – this is a 21.28 % year on year increase. In contrast, the average loan taken by a firm over 2 years old rose marginally by 6% from £238,645 in Q4 2023 to £254,203 in Q4 2024.

Across the board, the average loan value was £174,627 in Q4 2024 up from £159,664 in Q4 2023.

A Third Of Loans Needed For Working Capital But 1 In 5 Fund Growth

In Q4 2024, the main reason for a new loan was to provide working capital (33% of applications in Q4 2024). This is in line with the whole of last year when on average 34% of loans were for working capital.

More positively, 1 in 5 loans in Q4 last year (22%) were for investment in growth initiatives or business acquisitions.

Unsecured loans remain the main type of funding with 40% of applications in Q4 2024 for this type of loan, this was followed by secured loans (16%).

Todd Davison, MD of Purbeck Personal Guarantee Insurance said: “There remains a keen hunger for finance amongst small businesses, and in particular new firms, which is positive news for the economy. It seems there is a good deal of realism and pragmatism amongst small businesses in the face of increasing business costs following the Budget in October 2024."

"Small firms know they need to adjust to increased cost pressures and personal guarantee backed finance can help them through - whether that's via their bank, an alternative businesses lender or through initiatives such as the Growth Guarantee Scheme. With 1 in 5 using finance to fund growth or a business acquisition, many small businesses are on a set course to achieve their ambitions, despite the challenging macroeconomic climate."

“The fact that small businesses are increasingly using insurance to mitigate some of the risks associated with personal guarantee backed loans shows they are taking positive steps to improve their financial resilience. They are using this tool to gain access to the finance they need without exposing themselves to unnecessary risks."

"It remains vital however that firms familiarise themselves with the risks of personal guarantees, particularly those that form part of the Growth Guarantee Scheme."

"This scheme does not protect a business owner from a personal guarantee, it protects the lender. There should be no misunderstandings over the guarantor’s liability should the business ultimately fail.”

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Middle East Conflict Prompts Brits To Rethink Housing Plans

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