Rent and mortgage spending accelerated in May, Barclays finds

Annual growth in spending on rent and mortgages accelerated in May, rising by 6.3%, according to a major bank’s analysis of its current accounts.

This was faster than a 3.6% annual rise recorded by Barclays in April.

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.

The data covered payments to multiple lenders, including Barclays.

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.

Mark Arnold, head of savings and mortgages at Barclays, said: “Our latest rent and mortgage spending figures show that, despite the encouraging signs of falling inflation, we’re not out of the woods yet.

“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, director of research at property firm Savills, said: “Aspirations of home ownership remain strong, particularly as the cost of renting exceeds average mortgage payments in many locations.”