9:32 AM, 11th December 2024, About a month ago
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Rent and mortgage spending reached a 14-month high as more homeowners focus on improving energy efficiency in their homes for winter, according to Barclays.
According to Barclays Property Insight report, rent and mortgage spending grew 8.2 per cent year-on-year in November reaching a 14-month high.
The report also reveals a quarter of homeowners (25%) are making improvements to boost their home’s energy efficiency for winter as costs for utility bills rise.
According to the report, concerns around rising interest rates dropped slightly to 59% in November, down from a high of 63% in June 2024, following the Bank of England’s decision to reduce the base rate to 4.75 per cent in November.
Changes to stamp duty from April next year are causing huge concern for first-time buyers.
The Budget confirmed that, from April next year, stamp duty thresholds in England will be lowered. For first-time buyers, the exemption threshold will drop from £425,000 to £300,000, while for standard residential properties, it will fall from £250,000 to £125,000.
Nearly a quarter (23%) of homeowners say the cost of stamp duty is the biggest barrier to buying their next home.
Amongst renters, only 7% say the recent changes to Stamp Duty in the Chancellor’s October budget will delay their home-buying aspirations, although this rises to 27% in London. In contrast, almost two-thirds (64%) agree that property prices are the biggest barrier to buying a home.
Mark Arnold, head of mortgages and savings at Barclays, says the increase in rent and mortgage spending is causing supply and demand issues in the private rented sector.
He said: “The rise in rent and mortgage spending dampens some of the optimism felt following the recent drop in interest rates.
“For mortgage holders coming to the end of fixed rate deals set in or before 2022, they will only now be feeling the impact of the interim rate volatility. These effects are then being passed through to the rental sector, through higher rents and reduction in supply.”
Of those making energy efficiency changes to their homes, more than half (52%) aim to reduce long-term energy use, while a fifth (19%) hope to increase their property’s value.
The most popular improvements are loft insulation (48%), wall insulation (37%), double or triple glazing (35%), and fitting solar panels (33%).
However, one in three homeowners (35%) are discouraged from making improvements because they’re unsure which options are best for their property.
Some homeowners are also reluctant to shoulder the financial burden of retrofitting, with 69% of those identified as ‘able to pay’ saying the government should fund retrofitting activities, with a further two-thirds (67%) believing the government needs to take action to change how the nation heats or cools its homes.
Mr Arnold says the government must support people to make their properties more energy efficient.
He said: “We are seeing some positive news with homeowners interested in retrofitting measures, which has the dual effect of benefitting both the environment as well as consumers’ back pockets.
“However, there remains more to be done to build awareness and understanding of the options available. This is where we see the government being able to play a key role, helping to bring together the public and private sectors to collectively harness consumer interest and help accelerate efforts to make UK homes more energy efficient.”
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