Homeowners nearing the end of their fixed-rate mortgage terms are being pushed into remortgaging at higher rates, with monthly payments rising by an average of £243, according to new data from lender Barclays (BARC.L).
The figures show that despite the Bank of England (BoE) base rate falling from its peak of 5.25% to the current 4.5%, many individuals are not seeing a cut in their mortgage repayments. Most mortgage holders (72%) remain on fixed-rate deals, meaning their payments only change when their fixed term expires.
Of those who have remortgaged in the past year, 14% reported that their monthly payments had increased. Nearly 60% of these respondents saw an average rise of £242.70 per month, or £2,912.40 annually. This increase is most likely due to having taken out a fixed-rate mortgage before mid-2022, when rates were lower.
Read more: Average UK house price rises to almost £368,000
On the other hand, 10% of those who have remortgaged reported that their monthly costs had fallen — likely those who secured shorter-term products during the higher-rate period.
Barclays’ Property Insights also revealed that spending on rent and mortgages grew slightly by 2% year-on-year in January.
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.”
She also pointed to the growing focus on housebuilding, with new developments seen as crucial to increasing the housing supply.
“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.”
Despite ongoing challenges in the housing market, confidence among buyers has reached a six-month low, with just 24% expressing optimism. Rising property prices and upcoming stamp duty changes are adding to the pressure. Half of renters (51%) identified high property prices as the primary barrier to homeownership, up 11 percentage points from December. Similarly, 44% cited the cost of a deposit as a significant obstacle, up from 37% in the previous month.
Read more: Santander and Barclays cut mortgage rates below 4%
However, renters remain hopeful about their future prospects. One in five (23%) believe they will own a home within the next five years, while three in 10 (31%) are actively saving for a deposit.
Though confidence in the housing market has dipped, many still view housebuilding as part of the solution. Two-thirds (65%) of respondents believe new builds are necessary to address the UK’s housing shortage, with 42% also highlighting the economic benefits that new developments can bring to local communities.
The appeal of new builds is growing, with 42% of UK adults saying they would consider purchasing one. This figure rises to 52% among 18–34-year-olds, compared to just 11% of those aged 55 and over. Regional differences also emerge, with those in Northern Ireland (55%), London (51%), and the West Midlands (46%) most likely to consider buying a new property.
When it comes to purchasing a new build, 28% of homeowners say they have already done so. Key factors influencing this decision include the property being brand new (51%), its location (51%), the absence of a property chain (38%), and its modern features (35%).
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