Consumer confidence in housing costs remains steady
Rent and mortgage spending in the UK rose by 2% year-on-year in January, according to the latest Barclays Property Insights report.
Despite the uptick, consumer confidence in meeting housing costs remained stable at 52% from the previous month.
Concerns over rising interest rates eased slightly, with 61% of consumers expressing worry, down from 62% in December. This decline comes as homebuyers and homeowners anticipate potential base rate cuts by the Bank of England.
Consumer confidence in the housing market fell to a six-month low of 24%, as high property prices and impending Stamp Duty changes weigh on sentiment. More than half (51%) of renters identified property prices as a key obstacle to homeownership, an 11-percentage-point increase from December. Meanwhile, 44% cited deposit costs as a major hurdle, up from 37% the previous month.
Despite affordability concerns, some renters remain optimistic, with 23% believing they could buy a home within the next five years. Moreover, 31% reported actively saving for a deposit.
Many prospective buyers view new housing developments as a key solution to the UK’s supply shortage. Two-thirds (65%) believe new-build construction is essential, while 42% say such projects benefit local communities.
Younger buyers show strong interest in new builds
Interest in new builds is notably higher among younger generations, with 52% of 18- to 34-year-olds considering them, compared to 42% of the general population. Younger buyers are also more likely to view new homes as better value for money — 34% of 18- to 34-year-olds hold this view, compared to just 11% of those aged 55 and over.
Regionally, Northern Ireland (55%), London (51%), and the West Midlands (46%) have the highest proportion of residents willing to purchase new-build properties. Among current homeowners, 28% have previously bought a new-build home, with key factors influencing their choice including a lack of property chain (38%), modern features (35%), and energy efficiency (24%).
Around three in 10 homeowners (28%) reported upgrading their properties to improve energy efficiency, while 21% of renters said they were considering moving to a more energy-efficient home to reduce bills.
Mortgage rate trends
The Bank of England’s base rate is at 4.5%, down from a peak of 5.25%, but this has not necessarily translated to lower mortgage repayments. A majority (72%) of mortgage holders are on fixed rate deals, meaning their payments will only change when their current term ends.
Among those who have remortgaged in the past year (14%), nearly 59% saw their monthly payments rise — by an average of £242.70 per month, or £2,912.40 annually. This is likely due to the expiration of fixed-rate deals taken before mid-2022 when rates were lower. However, 10% of those who remortgaged saw their payments decrease, likely having locked into shorter-term deals during the high-rate period.
“The start of 2025 saw a slight increase in mortgage and rental spend, though encouragingly this hasn’t knocked consumers’ confidence in their ability to make payments,” said Sian McIntyre (pictured), managing director of mortgages and savings at Barclays. “This month’s reduction in the base rate was a further signal that we’re headed in the right direction.
“Housebuilding is increasingly a focus, with the nation’s outlook on new developments pragmatic, recognising the necessity for new builds as part of the solution to increase housing supply, as well as the advantages they can bring to both homeowners and communities. Ahead of April’s looming stamp duty changes, prospective buyers will continue to look for ways to pair aspiration and affordability, with energy efficiency a clear priority when choosing the right home.”
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