Spending on rent and mortgages grew 4.3% year-on-year in June 2025, down slightly from May’s 4.6% figure, according to new data from Barclays. It marks the fourth consecutive month of easing growth, reflecting greater stability in the rental sector as major lenders continue to cut mortgage rates. The slowdown, coupled with declining utility bills during the summer heatwave, is offering much-needed financial relief to landlords and tenants alike.
At the same time, consumer confidence in the UK housing market dipped three points to 27%, following the Bank of England’s decision to hold the Base Rate steady at 4.25%. However, fears over affordability appear to be softening – with fewer renters now citing house prices and monthly mortgage costs as significant barriers to homeownership.
Renters struggle to save
According to the latest Barclays Property Insights report, just over one in five renters (22%) are currently saving for a house deposit. Their average savings goal? A hefty £30,347.40 – which they hope to reach in 4.8 years. But the reality paints a bleaker picture: most renters are putting away just £230.80 a month, less than half of what’s needed to stay on track.
To hit their target in the desired timeframe, savers would need to squirrel away at least £526.86 a month – and that’s without factoring in inflation or any interest. As a result, many renters are likely to fall short, unless there’s a significant change in their financial circumstances.
“It’s clear from the data that many renters are optimistic but unrealistic about what it takes to build a deposit in the current market,” said Jatin Patel, Head of Mortgages, Savings and Insurance at Barclays. “Our findings underscore the importance of tailored solutions to address the diverse needs of today’s prospective homeowners.”
Interestingly, nearly half of renters (49%) believe it’s more expensive to rent than to pay a mortgage, and renters are almost three times more likely to struggle with housing costs than homeowners – 25% versus just 9%.
Older renters choose flexibility
It’s not just first-time buyers making headlines – many renters, particularly those over 55, are making a conscious choice to stay in the rental sector. In fact, one in five renters have previously owned a home, and among older tenants, 40% say they’ve sold up and now prefer the flexibility of renting.
“Later-life renters are choosing freedom over bricks and mortar,” said Patel. “For many, renting suits their lifestyle better – whether it’s downsizing, travelling, or simply avoiding the burden of home maintenance.”
Meanwhile, younger renters remain largely unaware of the support schemes that could help them onto the property ladder. While over half (53%) say homeownership would be impossible without government incentives, awareness of Shared Ownership remains stubbornly low. Nearly a third of consumers (31%) haven’t even heard of it, with the figure rising to 39% among 18–34-year-olds.
Still, for those who do know about the scheme, the benefits are clear. A third (34%) of respondents believe Shared Ownership offers a more affordable route into property, while one in five (19%) view it as a lifeline for struggling first-time buyers.
Cautious optimism
Despite low confidence in the market, experts are urging landlords and investors not to be discouraged. Will Hobbs, Managing Director at Barclays Private Bank and Wealth Management, offered a longer-term view: “We maintain that the starting point for the UK’s economy is better than widely acknowledged. Household balance sheets are more robust in aggregate.”
He added: “Blind optimism ultimately outperforms sober pessimism when it comes to the economy over longer periods of time, primarily because the march of technological change.”
Landlords – especially those with well-located, energy-efficient properties – may well find themselves in a stronger position in the months ahead, as tenant demand remains high and mortgage pressures begin to ease. While affordability continues to weigh on tenants, the growing need for flexibility, coupled with limited housing supply, could work in landlords’ favour.
