UK homebuyers are facing the most severe mortgage affordability pressures in nearly two decades, though the burden is not evenly distributed across the country, according to industry data released today.
Record High Repayment Ratios
The banking body UK Finance reported that initial mortgage repayments now consume more than a fifth (21.3%) of a homebuyer's gross income at the national level, the highest proportion since 2008. This data covers 2025 and does not account for the economic disruption caused by the Iran war, which has driven up mortgage costs significantly, leaving many borrowers paying hundreds or even thousands of pounds more than before the conflict.
Regional Disparities
The headline figure masks stark regional variations. The least affordable areas, measured by mortgage repayments as a percentage of income, are north Norfolk (25.7%) and the west London borough of Hillingdon (25.1%). Eight of the ten least affordable locations fall within the London commuter belt, including Luton (24.9%), Slough (24.8%), Broxbourne (24.4%), and Harlow (24.2%).
Conversely, seven of the ten most affordable local authority areas are in Scotland. Topping the list are East Ayrshire and Inverclyde, where the average homebuyer commits just 17% of gross income to initial mortgage repayments.
Surprisingly, the City of London ranks as the third most affordable area for home ownership. UK Finance attributes this to the fact that buyers in the City tend to be in the highest income brackets. The City, dominated by financial services, includes the Barbican estate's 2,000 flats and is one of the UK's most expensive housing markets.
UK Finance described this as a "quirk" of the analysis, noting that the City appears as affordable as some Scottish areas with much lower property prices.
Expert Commentary
James Tatch, head of analytics at UK Finance, said: "The past few years have been challenging for those trying to buy a property, with affordability pressures weighing heavy. But the pain is not felt equally across the country. Property prices, wages, and demographics vary greatly across and within regions. All of these have an impact on affordability."
Market Activity
Despite sustained affordability pressures from high property prices and borrowing costs, along with the challenge of saving for a deposit, 2025 saw robust mortgage borrowing activity. The number of mortgages advanced for house purchases reached 723,000, a 17% increase from 2024.
Borrowers had been benefiting from cheaper home loans until the outbreak of war on February 28, which caused a wave of fixed-rate mortgage deals to be pulled and repriced upward. However, in recent weeks, fixed-rate mortgage pricing has shown a gradual downward trend.
