Recent analysis reveals a significant shift in the UK mortgage market, with £500,000-plus mortgages increasingly being taken out by buyers outside of London and the South East. This trend indicates a growing affordability challenge as house prices rise across the country.
What is driving the rise in £500k mortgages?
According to Savills, the increase in £500,000-plus mortgages is largely attributed to rising house prices that have led to higher borrowing requirements. The Midlands saw a 17% increase in these mortgages, while the North experienced a 16% rise, and Scotland, Wales, and Northern Ireland saw an impressive 28% increase. In contrast, London and the South East experienced declines of 2.4% and 2.3%, respectively.
How has mortgage lending changed recently?
In 2025, a total of 62,391 mortgages of £500,000 or more were issued, representing 5.8% of all mortgage lending. This was a 24% increase compared to 2024, although it remains 9% below the peak observed in 2022. Despite the decline in London, the capital still accounted for 42% of these high-value mortgages.
What does this mean for borrowers outside London?
For borrowers in regions outside London, access to £500,000 mortgages has become more feasible, thanks to greater flexibility in affordability stress testing. This allows higher-earning households to secure larger loans despite the rising costs associated with servicing these mortgages. The annual cost of servicing a new £500,000 mortgage has increased from £25,100 in August 2021 to £34,100 this year, marking a 36% rise.
