According to the latest Barclays Property Insights report, the growth in rent and mortgage spending has slowed to its lowest rate in 17 months. This deceleration follows the Bank of England’s decision to reduce the base rate on August 1, fostering increased consumer confidence in household finances.

Spending on rent and mortgages grew by just 1.1% in August, the lowest rate recorded since March 2023. This slowdown is attributed to the recent base rate reduction, as well as lower utility costs driven by a 41.4% year-on-year drop in spending on energy, largely thanks to warmer weather and the Ofgem energy price cap.

Despite this easing, the rental market continues to face challenges. 20% of renters have reported receiving less value for their money due to sustained high demand, particularly among 18-34-year-olds, with 26% of this age group citing affordability concerns. The new academic year is adding pressure, with 17% of young renters saying they face increased competition for properties.

Mark Arnold, Head of Mortgages and Savings at Barclays, commented: “While we’ve seen encouraging signs that rent and mortgage growth is slowing, this is unlikely to be a consistent trend. Volatility may still occur in the coming months despite the recent rate cuts.”

As inflation and financial pressures decrease, consumer confidence in household finances has grown. This confidence has increased from 65% in July to 70% in August, according to the report. However, with 78% of mortgage holders on fixed-rate deals, only a small portion of consumers are currently benefiting from the recent rate reductions.

While spending on home improvements has decreased by 5.7%, other sectors such as garden centre spending have surged, increasing by 8.0% due to improved weather conditions.

As the housing market navigates these changes, both renters and landlords are advised to monitor conditions carefully before making housing-related decisions.