Consumer sentiment dips as homeownership challenges remain despite easing rates
Spending on rent and mortgages rose 4.3% year-on-year in June, according to new figures from Barclays Property Insights.
While this marks continued growth, it is the fourth consecutive month in which growth has slowed, reflecting the recent trend of lenders easing mortgage rates.
Utility spending was up just 1.2% in the same period, likely impacted by a heatwave and the latest reduction in the energy price cap.
The data also shows a fall in consumer confidence in the UK housing market, which dropped by three percentage points to 27%. The dip comes as the Bank of England held the base rate at 4.25%.
However, some affordability concerns are easing. In June, 39% of consumers cited property prices as a key barrier to homeownership, down from 45% in May. Concern over monthly mortgage payments also declined slightly, from 22% to 19%, in line with falling interest rates.
Despite the demand for support, awareness of government-backed housing schemes remains limited. Over half (53%) of renters believe they cannot afford to buy a home without financial support. Yet 31% of consumers said they had never heard of the Shared Ownership scheme. Among those aged 18–34, the figure rises to 39%.
Those who are aware of Shared Ownership see its potential benefits. One-third (34%) said the scheme offers a more affordable path to homeownership than traditional mortgages, while 19% view it as a viable option for first-time buyers.
Among renters, 22% are actively saving for a house deposit. On average, they aim to save just over £30,000 within 4.8 years. However, with monthly savings averaging £230.80, far below the £526.86 needed to reach that goal on time, many may struggle to stay on track unless their financial situation changes.
The report also highlights shifting preferences among older renters. Nearly half (49%) of all tenants believe renting is more expensive than owning, and 25% say they find it difficult to keep up with housing costs — compared with just 9% of homeowners.
Still, not all renters are looking to buy. One in five report having previously owned property, and among renters aged 55 and over, 40% fall into this category. A majority (56%) of older renters said they prefer renting due to the flexibility it offers, compared with 40% across all age groups.
“Our latest insights reflect a housing market in transition,” said Jatin Patel (pictured left), head of mortgages, savings and insurance at Barclays. “While lower mortgage rates are providing some relief, affordability remains a challenge.
“Our findings underscore the importance of tailored solutions to address the diverse needs of today’s prospective homeowners. While half of renters view homeownership as unattainable without financial support schemes, 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.”
Meanwhile, speaking about the UK economy, Will Hobbs (pictured right), managing director at Barclays Private Bank and Wealth Management, said data “are telling a particularly incoherent story at the moment.”
“Blind optimism ultimately outperforms sober pessimism when it comes to the economy over longer periods of time, primarily because the march of technological change.”
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