Mortgage and rental spending grew 2.0 per cent in January, while consumer confidence remains unchanged
- Rent and mortgage spending grew slightly year-on-year in January, up from 1.8 per cent in December
- Consumers’ confidence in their ability to afford rent and mortgage payments held steady at 52 per cent
- Homeowners who have recently remortgaged onto higher rates report an average increase in monthly repayments of £243
- Spending on utilities fell -10.1 per cent, as three in 10 are updating their properties to improve energy efficiency
- Barclays Property Insights combines data from across the Bank with consumer research to provide an in-depth analysis of UK housing trends
Rent and mortgage spending increased slightly to 2.0 per cent year-on-year in January according to the latest Barclays Property Insights report. Despite this increase, consumers’ confidence in their ability to afford rent and mortgage payments remained unchanged month-on-month at 52 per cent. Anticipating the Bank of England’s recent decision to cut the Base Rate, consumer concerns around rising interest rates dipped slightly to 61 per cent, down from 62 per cent in December.
Confidence in the UK’s housing market reached a six-month low of 24 per cent as buyers contend with rising housing prices and upcoming stamp duty changes. Half of renters (51 per cent) reported property prices as a main barrier to owning a home, up 11 percentage points from December. Similarly, 44 per cent see the cost of a deposit as a major blocker, rising from 37 per cent in December.
However, renters are still hopeful despite rising costs. One in five (23 per cent) believe that home ownership is within their reach within the next five years, with three in 10 currently saving for a deposit (31 per cent).
Young buyers eye up new builds
Despite falling confidence in the housing market, many are hopeful that housebuilding is the solution. Two thirds (65 per cent) believe that new builds are necessary to provide more housing in the UK, and two in five (42 per cent) say that new build developments create a halo effect for communities, bringing economic benefits to the area.
Over two-fifths (42 per cent) of UK adults say they would consider buying a new build, rising to over half of 18–34-year-olds (52 per cent). Compared to over 55s, younger generations are three times more likely to consider new builds better value for money than existing properties (34 per cent of 18-43-year-olds vs 11 per cent of 55+). Regionally, people from Northern Ireland (55 per cent), London (51 per cent), and the West Midlands (46 per cent) would be most willing to buy a new build property.
Of those who are already homeowners, three in 10 (28 per cent) say they have previously purchased a new build. The main factors influencing their decision include: a desired location (51 per cent), absence of a property chain (38 per cent) and modern features (35 per cent).
In addition, new homes are perceived as being more energy efficient (24 per cent) and more affordable than older properties (20 per cent).
Energy efficiency upgrades
Barclays customers’ spending on utilities dropped -10.1 per cent in January, despite the recent increase in Ofgem’s energy price cap.
This comes as both renters and homeowners are considering how to make savings. Three in 10 homeowners (28 per cent) say they are updating their homes to increase energy efficiency – for example by installing a heat pump or solar panels – whilst a fifth (21 per cent) of renters are thinking about moving to a more energy efficient home, to save money on their bills.
Rate Expectations
Although the Bank of England base rate (4.5 per cent) has fallen from its peak of 5.25 per cent, not all homeowners have seen a corresponding reduction in their monthly repayments, because only certain types of mortgages track the base rate automatically. Most mortgage holders surveyed (72 per cent) report being on a fixed rate, which means that their repayments only change when their fixed term comes to an end.
Of those who have remortgaged in the past year (14 per cent), nearly six in 10 (59 per cent) say that their monthly repayments have increased, by an average of £242.70 a month, or £2,912.40 a year. This is likely because they had previously taken out a fixed-rate mortgage before mid-2022, when mortgage rates were lower than they are today. Meanwhile, 10 per cent say their monthly costs are now lower after remortgaging – likely those who took out a shorter-term product during the higher-rate environment.
Sian McIntyre, Managing Director of Mortgages and Savings at Barclays, said: "The start of 2025 saw a slight increase in mortgage and rental spend, though encouragingly this hasn’t knocked consumers’ confidence in their ability to make payments. This month’s reduction in the base rate was a further signal that we’re headed in the right direction.
“Housebuilding is increasingly a focus, with the nation’s outlook on new developments pragmatic, recognising the necessity for new builds as part of the solution to increase housing supply, as well as the advantages they can bring to both homeowners and communities. Ahead of April’s looming stamp duty changes, prospective buyers will continue to look for ways to pair aspiration and affordability, with energy efficiency a clear priority when choosing the right home.”
To help address the challenges facing first-time buyers, Barclays now offers Mortgage Boost, enabling family or friends to increase – or ‘boost’ – the amount that can be borrowed towards a home, without having to lend or gift money directly and without the need for a larger deposit. For more information on Mortgage Boost, visit: https://www.barclays.co.uk/mortgages/mortgage-boost/
For more information on Barclays mortgage rates, visit: www.barclays.co.uk/mortgages/
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Notes to Editors
Mortgage and rental payments data is sourced from Barclays current accounts – e.g. transactions identified as direct debits and bank transfers to mortgage lenders and private landlords. Please note: the data includes payments to multiple lenders (including Barclays). It relates to the period December 25th 2023 – January 24th 2024 vs December 25th 2024 – January 24th 2025.
Consumer spending on utilities is sourced from Barclays current accounts – e.g. transactions identified as direct debits and bank transfers to utility providers. It relates to the period December 25th 2023 – January 24th 2024 vs December 25th 2024 – January 24th 2025.
The consumer research in this press release was carried out between 31st January and 4th February 2025 by Opinium Research on behalf of Barclays. There were 2,000 respondents in each round of research, providing a representative sample of UK consumers by age, gender, region, and income group.
For more information, please contact Annie McQuoid at annie.mcquoid@barclays.com .
About Barclays
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About Barclays Market and Customer Insights
Barclays Market and Customer Insights helps businesses keep up to date with spending trends, monitors their market position and enhances their understanding of customer behaviour, based on actual customer spending. For further information, please email contact-MCI@barclays.com.