Rent and Mortgage Growth Hits 17-Month Low After Bank of England Rate Cut
Spending on rent and mortgages has slowed dramatically, hitting its lowest growth rate in 17 months. The latest Barclays Property Insights report reveals a mere 1.1% increase in August, down from previous months. This drop follows the Bank of England’s decision to cut the base rate on August 1, sparking greater confidence among households.
Energy Costs Plunge and Warmer Weather Help Ease Household Bills
A massive 41.4% year-on-year fall in energy spending is a game-changer, thanks to the Ofgem energy price cap and unusually warm weather. Lower utility bills reduce the pressure on household budgets, contributing to slower rent and mortgage cost growth since March 2023.
Renters Still Feeling the Squeeze Amidst High Demand
Despite easing costs, the rental market remains tough. Around 20% of renters say they’re getting less bang for their buck, with 18-34-year-olds hit hardest. Over a quarter (26%) of Millennials and Gen Z cite affordability worries. The new academic year isn’t helping, as 17% of young renters report fierce competition for available properties.
Mark Arnold, Head of Mortgages and Savings at Barclays, warned: “While we’ve seen encouraging signs that rent and mortgage growth is slowing, this is unlikely to be a consistent trend. Volatility may still occur in the coming months despite the recent rate cuts.”
Consumer Confidence Climbs But Fixed-Rate Mortgages Limit Benefits
With inflation easing, consumer confidence jumped from 65% in July to 70% in August. However, most mortgage holders (78%) remain on fixed-rate deals, so only a small group feels the full benefit of the rate cut.
Home Improvements Drop, Garden Centres Boom as Brits Enjoy Better Weather
Spending on home improvements fell by 5.7%, but garden centres saw an 8% surge thanks to improved weather conditions. This shift shows how Brits are adapting their spending habits as the housing market remains unpredictable.
As the housing market adjusts to these changes, renters and landlords alike are advised to keep a close eye on developments before making any big moves.
