UK households increasingly worried about rising rent and mortgage costs

Over half of UK households are concerned about rising rent or mortgage costs, with four in 10 Brits admitting that they are very concerned about rising household costs.

Spending on rent and mortgages surged by 8.2% year-on-year in November, marking a 14-month high, according to the Barclays (BARC.L) Property Insights report.

When asked about household finances, 41% of Brits expressed deep concern about rising household bills, while a further 56% were somewhat worried about the impact of higher rent or mortgage payments. As housing costs continue to climb, nearly two-fifths (41%) of Brits are adjusting their spending habits to offset the increased pressure, with 29% actively seeking ways to reduce their rent or mortgage costs.

Some 59% of respondents expressed concern about higher interest rates despite the Bank of England’s decision to lower the base rate to 4.75% in November. While worries about borrowing costs remain a key concern, they have slightly eased from October.

Mark Arnold, head of mortgages and savings at Barclays, said: “The rise in rent and mortgage spending dampens some of the optimism felt following the recent drop in interest rates.

Read more: UK budget to keep inflation and interest rates higher for longer, says OECD

“For mortgage holders coming to the end of fixed rate deals set in or before 2022, they will only now be feeling the impact of the interim rate volatility. These effects are then being passed through to the rental sector, through higher rents and reduction in supply.”

Despite these rising housing costs, consumer confidence remains resilient, with many homeowners and renters believing they can still afford their housing payments. However, changes to stamp duty in the chancellor’s autumn statement have proven to be an obstacle for some prospective homebuyers, particularly among younger age groups.

Nearly a quarter (23%) of homeowners say the cost of the tax is the biggest barrier to buying their next home. This is particularly challenging for younger buyers, with 39% of those aged 18–34 citing stamp duty as a key obstacle, compared to just 15% of those over 55.

While only 7% of renters say the recent changes to stamp duty will delay their home-buying ambitions, the impact is felt more acutely in London, where 27% of renters report that the changes will affect their plans. Overall, nearly two-thirds (64%) of renters still consider high property prices as the primary obstacle to homeownership.

Among renters saving for a deposit, cost-cutting measures are a key strategy, with 37% looking to reduce monthly bills and 37% trimming discretionary spending. Additionally, 30% are sacrificing holidays to save, while another 30% are investing to build their housing fund.

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