The latest Barclays Property Insights report, which used mortgage completion data and mortgage and rental payment from Barclays along with consumer research, said the growing proportion of first-time buyers using low-deposit deals showed that this cohort was “increasingly overcoming cost-of-living pressures”.
First-time buyers have made up around 36% of Barclays’ mortgages in the past 12 months – however, there is a “growing appetite for external support”.
Nearly half of renters said buying a home would be impossible with a guarantor or family-backed mortgage, a rise from 42% in September.
Around 60% of renters said they would need financial incentives or home buying schemes to buy a property, an increase from 51% in September.
The report added that the biggest barriers to homeownership reported by renters were property prices and deposits, at 46% and 29% respectively.
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Housing confidence falls to lowest level since January
Barclays noted that confidence in the housing market fell to 24% in October, which is down from 27% in September.
This is the lowest confidence level in the housing market since January this year, which also came to 24%.
Sentiment around household finances showed that 63% were broadly positive, although this is 11% down month-on-month.
Approximately 37% of consumers were confident they could afford to move home in the next year if they so desired, and this went up to 46% of homeowners.
This was attributed to more manageable housing costs and bills, at 49%, followed by security of income and employment, at 27%, and being able to sell their property at a good price, at 26%.
On the flip side, less than a quarter of renters felt confident that they could afford to move in the next 12 months, whether that was buying or continuing to rent.
The cost of living was cited as the largest barrier, at 38%, followed by the ability to save for a deposit, at 34%, and the high cost of renting, at 32%.
Barclays’ own data showed that mortgage and rental spending rose 5.1% year-on-year in October.
This has led to over a third saying they were cutting back on small luxuries and 26% reducing essential spending such as groceries.
Only a third of renters believe Renters’ Rights Act will be good for them
When asked about the Renters’ Rights Act, a third of renters said they believed the measures would improve conditions and protection for tenants.
Around 28% said they were confident that it would make it easier to challenge unfair treatment from landlords.
A quarter of renters expressed concern that the act could push rents higher due to limits on evictions and bidding wars.
The act does prohibit bidding wars, saying that landlords should stick to no more than the advertised price, and it also limits rent increases to once per year. Renters can also challenge unfair hikes.
The percentage of renters worried about rising rents dropped to 16% in October, down from 18% in September.
The government confirmed that tenancy reforms from the Renters’ Rights Act would come into effect on 1 May.
Low-deposit deals show getting on property ladder is a ‘priority for renters’
Jatin Patel, head of mortgages, savings and insurance at Barclays, said the “increasing appetite for low-deposit mortgages demonstrates that getting on the property ladder remains a priority for renters”.
He continued: “It also highlights how industry innovation, such as family-backed mortgages and support schemes, is crucial in helping more people responsibly attain their homeownership goals.
“Despite overall confidence in the housing market softening, the appetite for homeownership remains strong. The turbulence of the last few years has slightly shifted the consumer mindset, where property is seen less of a ‘rite of passage’, but still considered an important financial milestone for long-term stability.”
Julien Lafargue, chief market strategist at Barclays, said: “With less than a week to go to the Autumn Budget and growing expectations that the Bank of England will lower interest rates once more in December, the UK real estate market appears primed to reaccelerate following a period of stagnation.
“That said, beyond improved economic visibility and slightly lower interest rates, the data shows that addressing the affordability challenge should remain a key priority.”
