April’s property market showing slowed spending amid an improvement rate environment. We review the findings and assess what they mean for the market in the months ahead.
Spending slows on rent and mortgages
Spending on rent and mortgages increased by 5.2 per cent in April from the same period in 2024. That represented a slight drop from March’s figure, which was 5.4 per cent, and a 2.3 per cent drop from February, which showed rent and mortgage spending at 7.7 per cent.
The drop in spending comes as many lenders reduced their rates ahead of anticipated drops in the Bank of England’s base rate later this week.
Confidence steadies amid rising costs
In April, confidence in household finances remained consistent month-on-month at 70 per cent, while confidence in the UK housing market remained steady at 29 per cent, the same level as March.
Research conducted between 18-22 April showed that interest rates remain a top issue for consumers, with 61 per cent naming it as a concern. Although, this does represent a slight drop from March’s figure of 63 per cent.
Speaking about this, Will Hobbs, Managing Director, Barclays Private Bank and Wealth Management, said: “The UK economy’s cyclical pulse has been strengthening a little in the last few months. Household incomes have continued to grow faster than inflation and that has been showing up in consumption. The uncertainty created by the US tariffs will certainly have some dampening effect. However, there are potential offsets in the form of lower energy prices and the dramatic changes happening in Europe. The latest read on inflation suggests a little more flexibility for the Bank of England too, ahead of tomorrow’s decision.”
As well as an increase in spending on rent and mortgages, costs are rising more generally. Three in 10 (30 per cent) say that of the housing costs that have risen in the last 12 months, council tax has increased the most.
Second-homeowners re-evaluate amid increases to council tax
As changes to council tax took effect from the start of April, many second homeowners are now evaluating the viability of keeping their additional property.
Due to a change in taxation policy in the early months of 2024, local authorities are now able to charge a council tax premium of up to 100 per cent on second homes. In order to do this, councils were required to give second homeowners a full one year’s notice, and, according to reports, the premium is being introduced by more than 200 councils in 2025.
Of the second homeowners surveyed who reported owning a second property, 35 per cent said they are planning to explore selling their additional property, with those affected revealing that their bills are set to rise by £840.10 per year on average.
The homeowners of tomorrow are feeling more confident
April 1st brought changes to the stamp duty bands, with the temporary increases to the thresholds that were put in place in September 2022 ending. With the changes now in effect, would-be homeowners were forced to take stock, and, in March’s Property Insights, 14 per cent of those surveyed told us that the recent band adjustments have impacted their ability to buy a home.
But, looking at new results, confidence among would-be homeowners has improved. Among those who currently renting in their ability to own a home within five years recovered slightly. A fifth (20 per cent) cited it as a possibility, a five per cent improvement from March.
The proportion of renters who see obtaining a mortgage as a barrier to owning a home also fell (18 per cent vs 21 per cent in March), this increase comes following several high street lenders dropping their mortgage rates last month.
The rise in confidence correlates with an uplift in renters saving for a deposit to buy a home, with almost three in 10 (27 per cent) doing so in April, compared to just over two in 10 (22 per cent) in March.
Speaking about this, Jatin Patel, Head of Mortgages, Savings and Insurance at Barclays, said: "Mortgage demand remains resilient, with encouraging signs that young renters feel more confident about entering the property market, despite high interest rates and an uncertain economic landscape. The Bank of England’s decision on Thursday will determine how optimistic we can be, but with average mortgage rates dipping below four per cent, and a lower energy price cap on the horizon, there are positives to be found amongst current market turbulence.”
For guidance on how to buy your first home, visit our dedicated section on the Barclays website.
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