• Consumer spending on mortgage and rental payments rose just 1.8 per cent in March, far below its peak of 12.2 per cent, recorded in June 2023
  • One in 6 aren’t confident in their ability to meet monthly mortgage and rental payments, while nearly a fifth are cutting back to keep up with rising housing costs
  • A tenth of homeowners are taking steps to retrofit their property to reduce energy bills and safeguard against future energy price shocks
  • Lack of supply is causing more than a fifth of renters to say they’re getting less value-for-money due to increased competition for properties
  • More broadly, consumer card spending saw its smallest uplift in three years, hampered by a slowdown in non-essential spend
  • 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

New data sourced from millions of Barclays current accounts* reveals growing stability in UK housing costs, which saw their lowest uplift in 12 months. However, many consumers are still cutting back or looking for additional sources of income as they continue to feel the effects of last year’s volatility. As a result, consumer card spending on non-essential items slowed to its lowest level in 18 months.

Barclays data shows that Brits spent just 1.8 per cent more on their mortgage and rental payments in March compared to last year. This was far below the 12.2 per cent increase recorded in June 2023 (when growth was at its highest), and the lowest year-on-year increase on file since March 2023.

However, not all consumers are back on solid ground – one in six (16 per cent) aren’t confident in their ability to meet their mortgage or rental payments, and 18 per cent are adjusting their spending habits to cope with rising housing costs.

LIS Show – MPU

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 per cent) have started renting out a room in their house in the past year. However, this figure rises to 12 per cent for homeowners in London.

Many renters say 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 (25 per cent) also cites the cost of a deposit as the biggest barrier to home ownership.

More broadly, household spending (e.g., DIY and electronics) fell -5.2 per cent in March, with one in six (16 per cent) holding off home renovations due to current economic pressures.

After reaching its highest point since November 2021 in February (59 per cent), consumers’ confidence in their ability to spend on non-essential items slipped to 55 per cent in March. However consumers’ confidence in their household finances remained steady in March, at 67 per cent.

Mark Arnold, Head of Savings & Mortgages at Barclays UKsaid: “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. We want help make those changes more affordable for customers, through schemes such as the Barclays Greener Home Reward, which gives a cash reward of up to £2,000 to UK residential mortgage customers who install a qualifying home energy efficiency improvement.”

Discretionary spending slows as retail and restaurant sales stall

Across all sectors, data from millions of Barclays credit and debit accounts show consumer card spending growth flatlined in March, on par with February’s 1.9 per cent uplift, and significantly less than the latest CPIH inflation rate of 3.8 per cent. This was largely due to a slowdown in non-essential spending, which saw its smallest increase (1.6 per cent) since September 2022, as wet weather dampened both retail and restaurant sales.

Retail spending remained almost flat at 0.7 per cent, brought down by falling in-store spending. Face-to-face retail (excluding groceries) was down -2.1 per cent and clothing fell -1.8 per cent, as spring showers deterred shoppers from visiting the high street. Meanwhile, restaurants had another challenging month, down -12.6 per cent, consistent with the fall witnessed in February (-13.4 per cent).

This comes as 45 per cent of consumers say they are continuing to rein in discretionary spending, with the majority (53 per cent) of this group cutting back on clothing and accessory purchases, and nearly half (47 per cent) spending less on dining out.

Overall growth figures

  Spend Growth Transaction Growth
Essential 2.4% 2.3%
Non Essential 1.6% 2.6%
OVERALL 1.9% 2.5%
Retail 0.7% 2.2%
Clothing -1.8% 3.1%
Grocery 2.7% 2.8%
·       Supermarkets 2.8% 2.2%
·       Food & Drink Specialist 1.4% 5.9%
Household -5.2% 2.2%
·       Home Improvements & DIY -7.4% -1.2%
·       Electronics -2.8% 5.0%
·       Furniture Stores -5.0% 1.7%
·       Garden Centres 1.3% 4.0%
General Retailers 3.4% 2.7%
·       General Retailers & Catalogues 5.9% 6.4%
·       Department Stores 0.1% 2.9%
·       Discount Stores -6.8% -10.4%
Specialist Retailers -0.6% -1.8%
·       Pharmacy, Health & Beauty 4.2% 0.3%
·       Sports & Outdoor -4.6% -6.3%
·       Other Specialist Retailers -2.9% -3.1%
Hospitality & Leisure 4.7% 3.1%
Digital Content & Subscription 7.7% 6.3%
Eating & Drinking 2.6% 0.1%
·       Restaurants -12.6% -15.0%
·       Bars, Pubs & Clubs 3.2% 2.3%
·       Takeaways and Fast Food 3.0% -0.7%
·       Other Food & Drink 5.4% 1.4%
Entertainment 3.1% 5.2%
Hotels, Resorts & Accommodation 1.0% -1.0%
Travel 7.8% 8.6%
·       Travel Agents 7.1% 12.6%
·       Airlines 9.7% 13.4%
·       Public Transport 4.0% 5.2%
·       Other Travel 11.1% 15.8%
Other 1.1% 1.7%
Fuel -7.1% -3.1%
Motoring -2.7% 2.2%
Other Services 8.4% 8.2%
Insperiences 3.6% 2.1%
Online 3.5% 5.8%
Face-to-Face 0.6% 1.2%

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