Rent and mortgage spending grew by 6.4% in October, the highest rate of growth recorded since September 2023, says Barclays Bank.

Despite this increase, the bank says consumers displayed their highest level of confidence in the UK housing market this year, as well as in their ability to afford housing payments, with concerns over rising rent and mortgage costs reaching their lowest level since April this year.

Some 55% told a bank survey that they are confident they can afford their monthly rental or mortgage outgoings – an increase compared to September (53%). 

Meanwhile, concerns around rising interest rates remained steady at 60 per cent, down from a high of 63 per cent in June 2024, following the Bank of England’s decision to hold the base rate at 5 per cent in September.

When asked about their household expenses, 79% are concerned about the rise in the energy price cap, with 42% also worried about the impact of rising household bills. However, spending on utilities fell 13% year-on-year despite the energy price cap rise on October 1, as prices are still below where they were in 2023. 

Over a quarter of renters (26%) reported having confidence in the UK housing market, while a fifth (21%) report that the recent drop in inflation has made them more confident in their ability to afford their housing costs. 

When asked ahead of the recent government Budget, young renters were hopeful about their prospects, as nearly half of 18 to 34-year-olds said homeownership is within their reach within the next five years. However, for older renters this drops off, as only three in 10 of 35–54-year-olds (28%) think it will be possible in their lifetime.

Property prices are viewed as the biggest barrier to homeownership by 69%, while 60% cite the cost of a deposit. Making matters more difficult, 32% note that their rental payments have increased over the last 12 months, impacting their ability to save for a property of their own.

Some18% are considering relocating in the next year, with relocating most popular among 18 to 34-year-olds (33%). UK cities are leading the charge for a desired location (30%) over the countryside (23%) and coast (20%).

Those living rent-free with family, friends or a partner are more likely to want to move to a city or urban area (40%), likely indicative of young people saving money ahead of a move for work.

A Barclays spokesperson says: “The housing market can be fickle, with housing trends and macro-economic factors having a direct impact on the monthly outgoings of millions of Brits. However, what truly drives the state of play is how confident consumers are feeling. Whether contemplating a relocation, purchasing a first home or redecorating, we can see that Brits have growing faith both in the housing market and in their ability to spend.

“Whilst spending on mortgages and rent has hit its highest level this year, so has consumers’ confidence in their homes. Even if interest rates fall as predicted, if this confidence is to be rewarded, more needs to be done to unlock greater capacity in the market to help drive down some of the financial barriers facing renters and homeowners as we look ahead to 2025.”