The Barclays Property Insights report found this rise was higher than the 1.8% annual increase recorded among its customers in December.
Despite this increase, consumers’ confidence in their ability to afford these costs remained unwavering and unchanged since the last report, at 52%.
Confidence in the UK housing market dropped to a six-month low of 24%, however, which Barclays said was due to buyers coming up against rising house prices and stamp duty changes.
Just over half – 51% – of the renters polled said property prices were the main barrier to homeownership, 11% higher than the share who said the same the previous month.
Some 44% said the deposit was a hurdle, up from 37% in December.
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Renters still have their sights set on homeownership despite these challenges, with 23% saying they could get onto the housing ladder within five years and 31% currently saving for a deposit.
Higher costs after remortgaging
While concerns about rising interest rates were relatively static and only fell slightly from 62% in December to 61% in January, Barclays’ report found that the majority of people who remortgaged in the past year saw their costs increase.
Of the 14% of borrowers who had refinanced in the last 12 months, 59% said their monthly mortgage repayments had risen by an average of £242.70 per month or £2,912.40 per year.
Barclays said these were likely borrowers who had taken out a mortgage before 2022, when rates were lower than they are now.
A tenth of respondents said their monthly costs were lower after remortgaging, which was possibly people who took out a shorter-term product when rates were escalating.
Counting on new-build development to improve housing prospects
Although respondents to the survey reported having lower confidence in the UK housing market, many said housebuilding could improve things.
Some 65% said new builds were necessary to increase the UK’s housing supply and 42% said such developments created a “halo effect” in communities and brought economic benefits to the local area.
More than two-fifths – 42% – said they would consider buying a new-build home, with this rising to 52% among those aged between 18 and 34. By contrast, just 11% of the over-55s were interested in new-build homes.
Some 28% of people who already owned a home said they had bought a new build in the past, with 51% doing so because it was new, 51% saying it was in a desired location, 38% drawn in by the lack of a property chain and 35% going for its modern features.
Further, 24% believed new homes were more energy efficient and a fifth said they were more affordable than older homes.
Although the Ofgem energy price cap rose recently, Barclays’ customers spent 10.1% less on utilities in January.
Regarding energy use, 28% of homeowners said they were upgrading their homes to make them greener and 21% of renters said they were considering moving to a more energy-efficient home to save money on bills.
Sian McIntyre, managing director of mortgages and savings at Barclays, said: “The start of 2025 saw a slight increase in mortgage and rental spend, though encouragingly this hasn’t knocked consumers’ confidence in their ability to make payments. This month’s reduction in the base rate was a further signal that we’re headed in the right direction.
“Housebuilding is increasingly a focus, with the nation’s outlook on new developments pragmatic, recognising the necessity for new builds as part of the solution to increase housing supply, as well as the advantages they can bring to both homeowners and communities. Ahead of April’s looming stamp duty changes, prospective buyers will continue to look for ways to pair aspiration and affordability, with energy efficiency a clear priority when choosing the right home.”
