Rent costs hit 17-month low – Barclays

Rent and mortgage spending growth slowed to its lowest rate in 17 months in August following the Bank of England’s base rate reduction, Barclays reports.

It says the move boosted consumer confidence in its latest Property Insights report.

Spending on rent and mortgages grew by just 1.1% in August, down from 1.9% in July – the lowest rate of growth since March 2023.

The decline is attributed to falling utility bills and a slight reduction in inflation.

Competition for rental properties

However, competition for rental properties remains high, particularly for young renters.

The influx of students into the market has added to the pressure on supply.

More than one in six 18-34-year-olds say that the influx of students is causing too much competition.

‘Spending on rent and mortgages is decelerating’

Mark Arnold, Barclays’ head of mortgages and savings, said: “In the year to date, we’ve seen encouraging signs that spending on rent and mortgages is decelerating on the whole, but unsurprisingly it isn’t a linear descent, and we could see some volatility over the coming months, despite the recent interest rate cut.”

The easing of financial pressures has led to a rise in consumer confidence with the proportion of consumers confident in their household finances increasing to 70% in August from 65% in July.

Confidence in the UK housing market has also risen, the report states.