Data from Barclays Property Insights reveals a slowdown in the growth of consumer spending on rent and mortgages for the third consecutive month in May, with a year-on-year increase of 4.6%, compared to April's 5.2%. This trend is coupled with an anticipation of increased costs for those nearing the end of their five-year fixed-rate mortgages. Spending on utilities also saw a rise of 4.4%, likely influenced by the energy price cap increase that took effect on April 1.
Jatin Patel, Head of Mortgages, Savings and Insurance at Barclays, commented: “Homeowners nearing the end of a five-year fixed-rate mortgage are preparing for an increase in their monthly repayments as they transition to higher rates, prompting many to weigh up the certainty of a longer-term fix against the flexibility of a variable or tracker product.”
In response to changing interest rates over recent years, more than seven in ten remortgaging homeowners anticipate an average annual repayment increase of £3,972. While some are considering transitioning to longer fixed-rate deals following a rate reduction by the Bank of England, others seek flexibility through Standard Variable Rate (SVR) or tracker mortgages.
The research indicates that renters face significant challenges in saving for home deposits. Over four in ten renters identify deposit requirements as major obstacles to homeownership, with expectations that it will take approximately 4.5 years to save enough. Gen Z renters expect to accumulate deposits fastest within about 3.9 years on average.
Efforts to save include cutting discretionary spending and seeking additional income sources such as side jobs. Nearly a quarter of renters express confidence in owning homes within their lifetime, while only 18% see it as achievable within five years.
Will Hobbs, Managing Director at Barclays Private Bank and Wealth Management, remarked: “We remain a little more upbeat on the UK’s economic outlook than many. That more optimistic tilt rests on the aggregate balance sheet strength of the UK’s households as well as still brisk real wage growth for those in work.”
Additionally, nearly one-tenth of UK adults have made property offers over the past year, often below asking prices—suggesting negotiation leverage for buyers despite some sellers' resistance.
Barclays conducted this analysis using data from current accounts alongside consumer research by Opinium Research between May 16-20, involving 2,000 respondents representing various demographics across the UK.