"The rise in rent and mortgage spending dampens some of the optimism felt following the recent drop in interest rates."
- Mark Arnold, head of mortgages and savings at Barclays
Rent and mortgage spending increased 8.2% year-on-year in November, reaching a 14-month high, according to the latest Barclays Property Insights report.
Despite increased costs, the survey shows that 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% in November, down from a high of 63% in June 2024, following the Bank of England’s decision to reduce the base rate to 4.75% earlier in the month.
When asked about their household expenses, four in 10 Brits (41%) reported being very concerned about rising household bills, with over half (56%) also somewhat worried about the impact of rising rent or mortgage costs.
Meanwhile, two fifths of Brits (41%) are adjusting their spending habits to offset rising housing costs, with a third (29%) 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% 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%) are making improvements to their home to increase its energy efficiency. Of those making changes over half (52%) are seeking to reduce long-term energy use and a fifth (19%) hope to improve the value of their property.
The most popular improvements are loft insulation (48%), wall insulation (37%), double or triple glazing (35%), and fitting solar panels (33%).
However, although some consumers are already taking these steps, recent research from Barclays found that one in three (35%) are dissuaded from making improvements to their home because they don’t understand which options are right for their property.
Some homeowners are also reluctant to shoulder the financial burden of retrofitting, with 69% of those identified as ‘able to pay’ saying the Government should fund retrofitting activities, with a further two-thirds (67%) believing the Government needs to take action to change how the nation heats or cools its homes.
Purchasing dreams not ‘stamped’ out
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.
Amongst renters, only 7% 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% in London. In contrast, almost two thirds (64%) 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%), alongside reducing discretionary spending (37%). 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.
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.”
