Yahoo News People paying rent or mortgage warned after Barclays 'analyse current accounts'
Rent and mortgage costs soared in May, Barclays has found. Spending on rent and mortgages surged in May, with a 6.3 per cent year-on-year increase reported by the leading high street bank Barclays's analysis of its current accounts.
The data was sourced using Barclays current account transactions which were identified as direct debits and bank transfers going to mortgage lenders and private landlords. Mark Arnold, head of savings and mortgages at Barclays, remarked: "Our latest rent and mortgage spending figures show that, despite the encouraging signs of falling inflation, we're not out of the woods yet."
He added: "With hopes of an imminent base rate cut fading, according to the latest swap rates (which lenders use to price their mortgages), we're likely to see housing costs remain high for a while longer." Frances McDonald, the Director of Research at leading estate agency, Savills, said: "Aspirations of home ownership remain strong, particularly as the cost of renting exceeds average mortgage payments in many locations."
Despite increased housing costs when compared with 2023 figures, the month-on-month difference was marginal, indicating that consumers may not be feeling worse off in the short term, particularly in light of the decrease in the Ofgem energy price cap in April, Barclays said.
It also pointed to signs that consumers are taking some comfort from slowing inflation. Six in 10 (62%) people in an Opinium Research survey for Barclays in May said the slowdown has made them more able to live within their means, and more than half (56%) of the 2,000 people surveyed across the UK feel more confident in their household finances.
Last month, Barclays moved to cut rates across various fixed mortgage products aimed at buyers and people remortgaging. Average mortgage rates have steadily increased since the start of February, with most mainstream lenders raising them several times.
But mortgage brokers say Barclays's announcements could mark a change in direction.
