Rent and Mortgage Spending Surges at Fastest Rate in Years

The latest research from Barclays reveals a significant surge in rent and mortgage spending, with a 6.3% annual growth rate in May. This marks the fastest rate of growth in years, despite increased housing costs compared to 2023 figures.

Housing market growth

According to the analysis of a major bank’s current accounts, the month-on-month difference in housing costs was marginal, but the overall trend is clear: people are spending more on rent and mortgages. This growth rate is higher than the previous month’s raise of 3.6%, according to Barclays.

Consumers Draw Reassurance from Slowing Inflation Rates

Despite the encouraging signs of falling inflation, consumers are still feeling the pinch. However, the research also showed that 62% of people felt more capable of living within their means due to the economic slowdown, while over 56% out of the surveyed 2,000 individuals expressed increased confidence about their domestic finances.

Inflation rates slowing

Mark Arnold, head of savings and mortgages at Barclays, commented: “Our latest rent and mortgage spending figures show that, despite the encouraging signs of falling inflation, we’re not out of the woods yet. With hopes of an imminent base rate cut fading, according to the latest swap rates (which lenders use to price their mortgages), we’re likely to see housing costs remain high for a while longer.”

Aspirations of Home Ownership Remain Strong

Frances McDonald, research director at property company Savills, commented: “Aspirations of home ownership remain strong, particularly as the cost of renting exceeds average mortgage payments in many locations.”

Aspirations of home ownership

The research highlights the ongoing challenges faced by consumers in the UK, but also suggests that people are adapting to the new economic reality. As the cost of living continues to rise, it remains to be seen how consumers will respond in the coming months.