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A sixth of homeowners plan to move as growth in mortgage spending slows

A sixth of homeowners plan to move as growth in mortgage spending slows
Shekina Tuahene
Written By:
Posted:
14/01/2025
Updated:
14/01/2025

Around a sixth – 16% – of homeowners plan to move this year, motivated by a drop in house prices, research from a bank suggests.

The Barclays Property Insights report showed that 9% said lower house prices encouraged this decision, as homeowners were now able to afford to purchase in desirable areas.

When it came to what they looked for, two-fifths wanted a garage or driveway, 39% wanted a garden and 32% wanted functional spaces like a pantry or utility room.

The research found that 30% of respondents had already moved home in the last three years, with 17% doing so for lifestyle reasons, a further 17% wanting to be closer to family and friends and 15% seeking a bigger home.

Renters hope to buy soon

Barclays’ report showed that renters were still hopeful about getting on the property ladder, with 22% believing this would be achieved within five years.

While there was optimism, two-fifths said property prices were the biggest barrier to homeownership and 37% cited the cost of a deposit.

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Many expect to rely on the Bank of Mum and Dad, as 57% said it would be hard to buy a home without a financial gift from family.

Despite the perception that family help would be needed, among those who recently purchased their first home, just 18% received a financial gift from family. Instead of requesting a lump sum, 12% used a mortgage that allowed the inclusion of family members to boost their borrowing capacity.

Independent homeownership

While many first-time buyers do seek family help, the research found that 35% of renters who were saving to buy a home wanted to build their deposit themselves. Nearly a fifth – 17% – were saving with a friend or partner.

Some 29% used a scheme for first-time buyers to help with their purchase, while a quarter selected a longer mortgage term to reduce monthly payments.

Of those saving for a deposit, 15% did not have a family that was able to contribute and a tenth had offers from parents or other relatives.

More than two-fifths – 41% – said they were assessing and attempting to reduce their monthly outgoings to help build their housing fund. Barclays said this behaviour could have contributed to the 6.7% fall in utilities spending, while a third signed up for cashback rewards, and 31% cut back on holidays.

Spend on mortgage and rent slows

The report also tracks the growth of spending on housing costs, and Barclays found that expenditure on rent and mortgage rose by 1.8% annually in December. This was down from 8.2% in November and the lowest growth rate since August 2024.

Despite this, consumer confidence in their ability to afford rental and mortgage payments fell to 52%, down 3% on the previous month. This was the lowest level of confidence over the whole of 2024.

Some 62% of respondents were worried about interest rate increases, up from 59% previously. However, the Bank of England cutting the base rate to 4.75% in November eased some of those concerns, with 18% of respondents saying it made them feel more positive.

Mark Arnold, head of mortgages and savings at Barclays, said: “December brought an easing to the growth in rent and mortgage spending seen in previous months, as the Bank of England’s rate cut in November took effect.

“Saving for a first home remains a huge challenge in the market, with the Bank of Mum and Dad still perceived as necessary by many hoping to get on the property ladder.”

Arnold added: “However, there is broader sentiment of cautious optimism and many renters are establishing strong savings habits to build a deposit in the current economic landscape. This is helped by the recent softening of house prices and imminent stamp duty changes, which have motivated both potential buyers and sellers to act swiftly.”