Renters Face Disproportionate Cost Pressures, Homeownership Elusive

Strategic Insights -

Renters are facing an increasingly bleak outlook as rising costs, particularly rent and mortgage spending, continue to squeeze their disposable income. According to Barclays Property Insights data, rent and mortgage spending increased by 5.2% year-on-year in July, while spending on utilities rose by 2.7%. This has resulted in renters feeling less confident in their ability to get on the property ladder and participate in the housing market.

Key Takeaways:

  • 62% of renters expect to see their rent increase this year, limiting their ability to save for a deposit.
  • House prices have overtaken the cost of deposit as the top barrier to homeownership, with 38% of renters citing it as a major challenge.
  • Only 12% of renters believe homeownership is within reach within the next year, and 16% think it will be possible within five years.
  • 45% of renters report adjusting their spending habits to ensure they can afford their housing costs.
  • 28% of renters are uninterested in homeownership, the highest figure so far this year.
  • Fewer than 20% of renters are actively building a house deposit, the lowest proportion this year.
  • 52% of consumers believe renting a property is more expensive than paying a mortgage.
  • Housing accounts for 30.8% of renters' take-home pay, compared to 26.6% of homeowners' gross income.
  • 26% of renters say they are currently struggling to afford their monthly payments.
  • 45% of renters would rather save as much as possible for their deposit to reduce future mortgage repayments.
  • 16% of renters would use all their savings to get on the property ladder, rising to 20% amongst millennials.
  • 34% of those looking to buy would move to a smaller property to borrow less.

Statistics:

  • Rent and mortgage spending increased by 5.2% year-on-year in July.
  • Spending on utilities rose by 2.7% in July.
  • 62% of renters expect to see their rent increase this year.
  • 38% of renters cite house prices as the top barrier to homeownership.
  • 12% of renters believe homeownership is within reach within the next year.
  • 16% of renters think homeownership will be possible within five years.
  • 45% of renters report adjusting their spending habits to ensure they can afford their housing costs.
  • 28% of renters are uninterested in homeownership.
  • 20% of renters are actively building a house deposit.
  • 52% of consumers believe renting a property is more expensive than paying a mortgage.
  • Housing accounts for 30.8% of renters' take-home pay.
  • 26% of renters say they are currently struggling to afford their monthly payments.

Sources:

  • Barclays Property Insights data
  • Barclays Private Bank and Wealth Management
  • Barclays
  • Will Hobbs, Managing Director, Barclays Private Bank and Wealth Management
  • Jatin Patel, Head of Mortgages, Savings and Insurance at Barclays