The research showed 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 said they were confident about their domestic finances
There was an acceleration in annual spending on rent and mortgages in May, which surged by 6.3%, according to the analysis of a major bank’s current accounts.
This growth rate was higher than the previous month’s raise of 3.6%, according to research by Barclays. The bank used its current account transactions for this study, specifically identifying direct debits and bank transfers heading towards mortgage lenders and private landlords.
These transactions covered multiple lenders, with Barclays itself being among them. While the figures indicated a rise in housing costs when compared to 2023, the difference on a month-to-month basis seemed negligible, implying consumers may not feel worse off in the short run, especially considering the decrease in the Ofgem energy price cap last April.
The bank also noted indications of consumers drawing some reassurance from slowing inflation rates. Survey results from Opinium Research for Barclays revealed in May showed that 62% of people felt more capable of living within their means due to the economic slowdown, while over half (56%) out of the surveyed 2,000 individuals across the UK expressed increased confidence about their domestic finances.
Regarding these findings, Mark Arnold, who is head of savings and mortgages at Barclays, said: “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.”
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.”
