Extra spending on rent is less than inflation rate - bank data

New data sourced from millions of Barclays current accounts reveals growing stability in UK housing costs, which saw their lowest uplift in 12 months. 

The bank says Britons spent just 1.8% more on their mortgage and rental payments in March 2024 compared to last year. This was far below the 12.2 per cent increase recorded in June 2023 when growth was at its highest. 

To improve energy efficiency and safeguard against future energy price shocks, one in 10 homeowners are taking steps to retrofit their property. To generate additional income, a relatively small percentage of homeowners (3%) have started renting out a room in their house in the past year. However, this figure rises to 12% for homeowners in London.

Many renters claim they’re losing out because demand is outpacing supply – 22 per cent feel that there is too much competition for rental properties in their area, resulting in less value-for-money. As the current cost of living makes building sufficient savings more challenging, one in four renters also cites the cost of a deposit as the biggest barrier to home ownership.

Spending on essential items grew 2.4%, close to February’s 2.3%. Grocery spending, up just 2.7%, recorded its slowest growth since September 2022, due to falling food price inflation, which reached its lowest level of 5% since January 2022. 

Mark Arnold, Head of Savings & Mortgages at Barclays UK, says: “Non-essential spending is still reeling from last year’s spike in housing costs, which caused both homeowners and renters to cut back while looking for additional sources of income – such as delaying renovations and renting out spare rooms.

“However, there are reasons to be optimistic – our data shows that housing costs are stabilising, the inflationary tide is easing, and interest rates are predicted to fall over the coming months, all of which should translate into increased consumer confidence and spending.”

“Moreover, homeowners are taking sensible steps to safeguard themselves from future energy price shocks – with upgrades such as installing a heat pump or solar panels to improve energy efficiency also becoming popular.”

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