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Consumer Spending on Housing Costs Increased in April

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    Rental and Mortgage Spending Has Risen by 3.6% According to Barclays

    According to research from Barclays on consumer spending habits, the amount spent on housing costs increased in April. This is the first time the growth rate has increased since December 2023, after a three-month slowdown from January to March.

    The data shows that UK spending on rental and mortgage payments increased by 3.6% annually in April.

    This information is sourced from millions of Barclays’ current accounts, showing the average monthly spending and what people spend their money on. Barclays have access to nearly half of the country’s credit and debit card transactions, meaning they have extensive insight into consumer spending habits. This data is combined with consumer research conducted with 2000 respondents to get a fuller picture of UK housing costs and spending.

    Further Reading: Take a look at our buy-to-let guide to find out the answer to questions such as ‘Where is the best place for buy-to-let in the UK?’.

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      Are Brits Coping with the Rise in Housing Costs?

      After a challenging year for the UK property market in 2023, Brits are still apprehensive about the current state of the housing market. Just one in four (25%) stated they were confident in the strength of the housing market.

      However, despite concerns about the overall economic landscape, Barclays believes that consumers are still optimistic about their own personal finances, with only 15% stating that they do not feel confident in their ability to keep up with monthly mortgage or rental payments. This is a slight improvement from last month’s figure of 16%.

      According to Barclays, household spending on homewares, electronics, and DIY fell by -4.1%, possibly to compensate for increased housing costs, suggesting that many have postponed renovations or home improvement. 40% of Brits have said they will not spend money on sprucing up their home or garden before summer.

      Mark Arnold, Head of Savings and Mortgages at Barclays, said: “Consumers and lenders alike are anticipating a drop in interest rates this year, but optimism is understandably tentative as the market is still feeling the effects of last year’s volatility. Our data shows that Brits are still facing higher rent and mortgage payments, although costs are still slowing down over the longer term.”

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      Are Housing Costs Set to Continue Rising?

      The elevated Bank of England base rate has significantly impacted mortgage payments, so it’s not surprising that mortgage costs have inflated. However, forecasters such as Savills have predicted that the base rate will be lowered later this year.

      When it comes to rental costs, the past few years have seen record rises in rental inflations. This has slowed down somewhat, but with the ongoing supply-demand imbalance in the private rental sector, it seems likely that rental increases will continue for the foreseeable future. Learn more about how to get into real estate with our free guide.

      To learn more about the UK property market, read our buy-to-let area guides focusing on topics such as available investment property in Northampton and investment property in Bexley.

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      Jessica Ferris

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      Jessica is a property content writer at RWinvest. Keeping a close eye on the UK property market, Jessica helps our readers stay informed and up to date on the latest market news and statistics.