Rent and mortgage spending rose by 4.3% year-on-year in June, according to Barclays Property Insights, marking the fourth consecutive month of slowing growth as lenders continue to lower mortgage rates.
Spending on utilities saw only a modest increase of 1.2%, influenced by warmer weather and the recent reduction in the energy price cap.
Consumer confidence in the housing market declined, with just 27% of respondents feeling positive about conditions, down three points from May.
Despite this, fewer people are citing property prices and mortgage payments as major barriers to ownership.
In June, 39% named property prices as a key obstacle, down 6 points, while 19% pointed to monthly mortgage costs, down 3 points.
However, awareness of Government-backed schemes remains a concern. Barclays found that 53% of renters believe homeownership would be impossible without some form of financial assistance, yet 31% of consumers – and 39% of 18–34-year-olds – had never heard of the Shared Ownership scheme.
Among those who were familiar with it, a third (34%) believed it offered a more affordable route to homeownership, while 19% viewed it as a potential solution for first-time buyers struggling to enter the market.
Saving habits among renters reveal a challenging path to homeownership. Just 22% are actively saving for a deposit, targeting an average of £30,347 over a 4.8-year period.
Yet typical monthly savings stand at £230.80 – less than half the £526.86 required to meet that goal within the projected timeline.
Later-life renters show a different set of priorities. Of all tenants, 22% previously owned a home, including 40% of those over the age of 55.
Among this older group, 56% said they preferred renting due to the flexibility it provides, compared with a national average of 40%.
Jatin Patel, head of mortgages, savings and insurance at Barclays, said: “Our latest insights reflect a housing market in transition. 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.”
Will Hobbs, managing director at 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.”
