Rent and mortgage spending in the UK rose by 5.2% year-on-year in April, slightly lower than the 5.4% increase observed in March, according to Barclays Property Insights. The slowdown coincides with widespread rate reductions from lenders. "Mortgage demand remains resilient, with encouraging signs that young renters feel more confident about entering the property market," said Jatin Patel, Head of Mortgages, Savings and Insurance at Barclays.
Despite the interest rate concerns among consumers, which decreased to 61% from 63% in March, confidence in household finances remained stable at 70%. Additionally, a quarter of mortgage holders are making overpayments averaging £221 extra per month. These overpayments are predicted to reduce their mortgage term by an average of four years.
Council tax changes have also impacted homeowners. A new council tax premium can add up to £840 annually for second homeowners, prompting a third of them to consider selling their additional properties.
Barclays reported a slight recovery in renters' confidence regarding homeownership within five years; this increased from 15% in March to 20% in April. Furthermore, the proportion of renters who see obtaining a mortgage as a barrier has fallen following recent mortgage rate drops.
Will Hobbs, Managing Director at Barclays Private Bank and Wealth Management, noted that household incomes have been growing faster than inflation: "The uncertainty created by the US tariffs will certainly have some dampening effect. However, there are potential offsets."
Barclays encourages individuals interested in understanding more about mortgages or borrowing capacity to use their online mortgage calculators.