Rent and mortgage spending increased 1.8% year-on-year last month, the lowest level of growth since August 2024 and down from 8.2% in November.

These figures come the latest Barclays Property Insights report, which points to homeowners benefitting from base rate reductions.

Though the data offers some encouragement, costs continue to increase, and consumers’ confidence in their ability to afford their rental and mortgage payments dropped to 52% in December (down 3 percentage points), the lowest level in 2024.

Concerns around rising interest rates rose slightly to 62%  last month although they remained below the 63%  high recorded in June 2024. The Bank of England’s decision to reduce the base rate to 4.75% in November mitigated some of these concerns, with one in five consumers (18%) reporting feeling more optimistic in light of the recent rate reduction.

Renters are still eying up the property ladder despite rising costs, with one fifth (22%) believing that home ownership is within their reach within the next five years. However, obstacles remain – when identifying the biggest barriers to homeownership, two-fifths (40%) say property prices, and 37% cite the cost of a deposit.

In an effort to overcome these obstacles and save for a deposit, demand for the ‘Bank of Mum and Dad’ is high for the year ahead, as 57% of renters  believe it would be impossible to buy a home without an inheritance or loan from a family member.

Although perceived as a necessity, of those who have recently bought their first home, just 18% report having had financial help from family. Rather than ask for a lump sum, one in 10 (12%) opted to make use of a mortgage product which involves family members to increase their borrowing capacity.

Seeking support elsewhere,29% opted to use a first-time-buyer scheme to assist their purchase, whilst a quarter (25%) locked-into a longer mortgage term to help reduce monthly costs.

Of those saving for a deposit, 15% have family that are unable to contribute, while 10% have had offers of support for a deposit contribution from parents and/or family members.

Looking ahead to 2025, one in six homeowners (16%) intend to move this year. Recent drops in house prices are a cause for optimism, with one in 10 (9%) considering previously unaffordable properties in more desirable areas to now be within their price range.

Commenting on the latest research Barclays head of mortgage services Mark Arnold said: “December brought an easing to the growth in rent and mortgage spending seen in previous months, as the Bank of England’s rate cut in November took effect.

“Saving for a first home remains a huge challenge in the market, with the Bank of Mum and Dad still perceived as necessary by many hoping to get on the property ladder. However, there is broader sentiment of cautious optimism and many renters are establishing strong savings habits to build a deposit in the current economic landscape.”

He added: “This is helped by the recent softening of house prices and imminent stamp duty changes, which have motivated both potential buyers and sellers to act swiftly.”