Uptick in Confidence Reported in UK Property Market

The latest Barclays Property Insights reports have revealed that affordability constraints in housing may be alleviating somewhat, while supply for renters continues to be an issue. Other reports have called for more buy-to-let investment and rental property investors in the market to support rental stock.

According to Barclay’s data, spending on rent and mortgages grew by 1.1% in August. This is the slowest rate recorded since March 2023, suggesting the pressures on housing affordability seen in the past few years may be easing slightly. This comes after the Bank of England’s decision to reduce the Base Rate earlier in the month by 0.25%.

After the long-awaited Base Rate cut, 70% of those polled now say they are confident in their household finances, up from 65% in July. Confidence has hit the 70% mark for the first time since April this year.

British people are now experiencing lower bills as the warmer weather, along with the Ofgem energy price cap, drove the fourth consecutive reduction in utility spending, falling by -11.4% on an annual basis.

Confidence in the UK property market is also on the rise, increasing from 25% to 29% over four months. Barclays suggests that this relatively small increase could be due to the fact that 78% of mortgage holders are on a fixed-rate deal, meaning only a small proportion of consumers will immediately see the benefits of the recent rate cut.

Mark Arnold, Head of Mortgages and Savings at Barclays, said: “Many people think that interest rates are what really determine the mortgage market – and whilst that’s true to some extent, for me, the biggest driver is confidence. If you’re going to make the biggest purchase of your life, you need to be confident that the economy is stable, inflation is under control, and you know what you’re going to pay. That stability and confidence will determine how people spend, even for renters.”