The fall in inflation and energy bills relieves pressure on household finances, in a context of rising rent and mortgage costs

• Consumer spending on utilities fell -12.5 per cent in May following Ofgem’s energy price cap reduction in April
• Home improvement and DIY spending showed signs of recovery last month, with the sector recording its strongest performance since August 2023
• Rent and mortgage costs rose as spending rose 6.3% in May – faster than the 3.6% recorded in April
• The monthly difference in housing costs was marginal (-0.01 percent), indicating that consumers may not be worse off in the short term
• Almost a third of homeowners bought their first property because it was cheaper than renting long term
• Barclays Property Insights combines transaction data from millions of Barclays current accounts with consumer research to provide an in-depth look at UK housing costs

Data from millions of Barclays current accounts* shows that spending on rent and mortgages rose 6.3% year on year in May – faster than the 3.6% increase recorded in April. However, signs of optimism are emerging due to the fall in inflation and energy prices, and the increase in spending on improving housing shows indicators of recovery for the sector.

Data from Barclays Property Insights shows that the cost of rents and mortgages continued to accelerate in May, with a 6.3% increase year-on-year. Meanwhile, consumer confidence took a hit as Brits also began to feel the impact of rising household bills such as broadband and council tax.

Some comfort is being taken from the latest inflation figures, with six in 10 (62 per cent) saying the slowdown has made them better able to live within their means, and a similar proportion (56 per cent) feel more confident in your household finances. . Meanwhile, confidence in the strength of the UK property market increased slightly last month, from 25% to 27%.

Despite the increase in housing costs compared to 2023 values, the monthly difference was marginal (-0.01 percent), indicating that consumers may not be feeling worse off in the short term, especially in light of the decline in Ofgem energy. price cap in April, which caused consumer spending on public services to fall -12.5 percent in May.

First-time barriers

Climbing the property ladder is seen as a major milestone for many Brits, with a tenth (10 per cent) of people who have never owned a property saying they feel under social pressure to be a property owner. Three in 10 (30 per cent) cite the cost of a deposit as the biggest barrier to buying a home, while 18 per cent say they are delaying entry into the property market due to high interest rates.

Some are choosing to forgo home ownership altogether, with one in seven renters (15%) saying they prefer the flexibility it gives them. For others, housing is no longer an attractive investment, with 12 percent saying they prefer renting due to low confidence in the strength of the UK property market.

Looking at the “bank of mom and dad”, the older generation received less help from their parents to buy their first home – 10 per cent of over-55s say they received financial support, compared to 19 per cent of young people between 18 and 34 years old. .

For those who bought property, the reasons were varied – 30 per cent bought a home because it was cheaper than renting long-term, while 24 per cent said they got on the property ladder because it was a good investment.

Home Improvement Gets a Holiday Boost

Although the retail sector continues to struggle, consumer spending on home improvements showed signs of recovery last month. Furniture stores, although still in decline, recorded the smallest drop (-2.3 percent) since last August, while construction materials and DIY stores (-5.4 percent) had the best performance since last September , probably driven by owners who capitalized on the start of the year. May holiday to decorate your living spaces.

Mark Arnold, Head of Savings and Mortgages at Barclays, said: “Our latest spending figures show that rent and mortgage payments are still a challenge for consumers. However, there are encouraging signs of improvement ahead, with falling inflation and interest rate cuts in Europe giving hope that the Bank of England will follow suit in the coming months.

“Many lenders are finding creative solutions to the problems facing first-time buyers. Products like Barclays’ Springboard mortgage or Kensington Mortgages’ flexible lending criteria help overcome some of the barriers and make home ownership more viable.”

For more information on how Barclays is supporting first-time buyers, visit www.barclays.co.uk/mortgages/first-time-buyers/.

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Notes for editors
*Mortgage and rent payment data from Barclays current accounts – for example, transactions identified as direct debits and bank transfers to mortgage lenders and private landlords. Note: Data includes payments to various creditors (including Barclays). Relates to the period from April 20, 2024 to May 16, 2024. It is compared to the period from April 22, 2023 to May 19, 2023.

Across its issuing and acquiring business, Barclays carries out almost half of the country’s credit and debit card transactions, giving us unique insight into UK consumer spending. The expense data in this press release comes from Barclays’ issuance business – i.e. transactions with Barclays debit cards and Barclaycard credit cards. Relates to the period from April 20, 2024 to May 16, 2024. It is compared to the period from April 22, 2023 to May 19, 2023.

The Barclays consumer spending research in this press release was conducted between May 17, 2024 and May 21, 2024 by Opinium Research on behalf of Barclays. There were 2,000 respondents, providing a representative sample of UK consumers by age, gender, region and income group.

For more information, contact Annie McQuoid at annie.mcquoid@barclays.com

About Barclays
Our vision is to be the UK-centric leader in global finance. We are a diversified bank, with comprehensive consumer, corporate, wealth and private banking franchises in the UK, a leading investment bank and a strong specialist consumer bank in the US. Through these five divisions, we work together toward a better financial future for our customers, clients and communities.
For more information about Barclays, visit our website casa.barclays

About Barclays Market and Customer Insights
Barclays Market and Customer Insights helps businesses stay up to date with spending trends, monitor their market position and improve their understanding of customer behavior based on actual customer spending. For more information, please email contact-MCI@barclays.com.

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