Consumer confidence in housing affordability hits 2024 low
Rent and mortgage spending in the UK rose 1.8% year-on-year in December 2024, marking the slowest growth since August, according to the latest Barclays Property Insights report.
Despite the slowdown, affordability concerns remain, with consumer confidence in meeting housing payments falling to 52% — a three-point decline and the lowest level recorded last year.
Rising interest rates remain a worry for many, with 62% of respondents citing concerns in December, a slight increase from the previous month but still below the June peak of 63%. The Bank of England’s decision to cut the base rate to 4.75% in November provided some relief, with 18% of consumers reporting increased optimism.
Amid rising costs, 22% of renters believe homeownership is achievable within the next five years. However, affordability barriers persist, with 40% pointing to high property prices and 37% identifying deposit costs as major hurdles.
Family financial support remains a key factor for prospective buyers, with 57% of renters stating that homeownership would be impossible without an inheritance or loan from family. Yet only 18% of recent first-time buyers reported receiving financial help from relatives. Instead, 12% turned to mortgage products involving family support.
While family contributions play a significant role in the market, 35% of renters saving for a deposit reported doing so independently. Meanwhile, 17% said they are pooling resources with friends or partners to share the cost.
Government support schemes have also helped bridge the gap, with 29% of recent homeowners using first-time-buyer programmes. Additionally, 25% opted for longer mortgage terms to reduce monthly repayments.
Some renters are adjusting their budgets to build savings. Measures include reducing monthly bills (41%), cutting discretionary spending (39%), using cashback rewards (33%), and limiting holiday expenses (31%). These efforts may explain the 6.7% drop in utilities spending, despite higher energy prices.
Barclays also reported that in the past three years, 30% of Brits have moved home, driven by lifestyle improvements (17%), proximity to family and friends (17%), and the need for larger spaces (15%). Looking ahead to 2025, 16% of homeowners plan to move, with recent house price declines encouraging 9% to consider previously unaffordable properties.
Top priorities for prospective buyers include garages or driveways (40%), gardens (39%), and functional spaces such as utility rooms (32%).
Consumer spending on household items saw its smallest decline of 2024 in December (-0.3%), as homeowners prepared for the festive season. Seasonal spending boosted garden centre sales by 3.1%.
Many homeowners are investing in their properties, with 24% focusing on energy efficiency upgrades and 28% making improvements to increase sale value. Looking ahead, 43% plan to renovate or redecorate.
Mark Arnold (pictured), head of mortgages and savings at Barclays, noted that the Bank of England’s rate cut had started to ease pressure on housing costs.
“Saving for a first home remains a huge challenge in the market, with the Bank of Mum and Dad still perceived as necessary by many hoping to get on the property ladder,” Arnold said. “However, there is broader sentiment of cautious optimism, and many renters are building strong savings habits to navigate the current economic landscape.”
He added that declining house prices and upcoming stamp duty changes could motivate more buyers and sellers to take action in the near term.
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