"Half of renters view homeownership as unattainable without financial support schemes, yet there remains a significant gap in awareness of initiatives like Shared Ownership, particularly among younger adults"
- Jatin Patel - Barclays
Growth in mortgage and rent spending continued to decelerate in June, marking the fourth consecutive month of slower increases, according to new data from Barclays Property Insights.
Annual spending on housing rose 4.3%, slightly below the 4.6% recorded in May, while utility costs rose by just 1.2%, helped by the recent heatwave and a new energy price cap.
Confidence in the UK housing market also slipped, falling three points to 27%, following the Bank of England’s decision to keep the Base Rate steady at 4.25%. Despite this, some affordability concerns appeared to ease. In June, 39% of consumers identified property prices as a major barrier to ownership, down six points from May.
The proportion citing monthly mortgage payments also declined, falling three points to 19%, as lenders continue to lower rates.
Support schemes lack visibility despite demand
53% of renters believe that buying a home would be out of reach without access to financial support or government schemes. Yet awareness of initiatives such as Shared Ownership remains limited. Three in 10 people (31%) said they were unaware of the scheme entirely, with that figure rising to 39% among those aged 18 to 34.
However, those familiar with Shared Ownership often view it favourably. “Shared Ownership offers a more affordable route to getting on the property ladder compared to a traditional mortgage,” said 34% of respondents. “These types of initiatives offer a solution for first-time buyers struggling to get on the housing ladder,” noted 19%.
Saving targets misaligned with reality
Among renters currently saving for a deposit, the average target is just over £30,000, expected to be saved over 4.8 years. This would require average monthly contributions of £526.86.
In practice, however, savers are putting aside less than half that amount, averaging £230.80 per month, excluding any gains from interest or inflation. This shortfall suggests many may fall behind unless their financial circumstances change.
Rental pressure and later-life preferences
49% of all tenants believe that renting is more expensive than paying a mortgage. Renters are also more likely to report difficulty managing housing costs, with 25% saying they struggle compared to just 9% of homeowners.
Not all renters are new to the housing market. 22% said they had previously owned a home, including 40% of those aged 55 or over. Flexibility appears to be a driving factor for older renters, with 56% of those in this age group stating that renting suits their current lifestyle, compared to a national average of 40%.
Affordability remains a challenge
“Our latest insights reflect a housing market in transition,” explained Jatin Patel, head of mortgages, savings and insurance at Barclays. “While lower mortgage rates are providing some relief, affordability remains a challenge.
“Half of renters view homeownership as unattainable without financial support schemes, yet there remains a significant gap in awareness of initiatives like Shared Ownership, particularly among younger adults. Bridging this knowledge gap is crucial to empowering first-time buyers and fostering greater accessibility to the property market.”
Will Hobbs, managing director of Barclays Private Bank and Wealth Management, added, “Data on the economy are telling a particularly incoherent story at the moment. We maintain that the starting point for the UK’s economy is better than widely acknowledged. Household balance sheets are more robust in aggregate and the corporate sector is potentially well placed to benefit from the incoming industrial revolution in machine learning and generative AI.
“The news of the world around us remains unsettling, but it is important to remember that the economy is capable of dancing to a quite different tune. Blind optimism ultimately outperforms sober pessimism when it comes to the economy over longer periods of time, primarily because the march of technological change.”
