TL;DR
- •UK homeowners spent around a fifth of their income on mortgage payments in 2025, the highest level since 2008.
- •The areas with the least affordability were North Norfolk and the London Borough of Hillingdon, where over a quarter of gross income went to mortgage repayments..
- •This is the highest level since 2008, with homebuyers spending on average 21.3% of their gross income.
As of May 2026, UK homeowners spent around a fifth of their income on mortgage payments in 2025, according to UK Finance. This is the highest level since 2008, with homebuyers spending on average 21.3% of their gross income. This article will delve into what this means for homeowners and potential buyers, with worked examples and a look at the broader market context.
Regional Differences in Mortgage Affordability
UK Finance’s Lending Where We Live report revealed significant regional differences in mortgage affordability. North Norfolk in East Anglia and the London Borough of Hillingdon saw borrowers spending over a quarter of their gross income on mortgage repayments, at 25.7% and 25.1% respectively. Other areas in the London commuter belt, such as Luton (24.9%), Slough (24.8%) and Spelthorne (24.8%), also ranked among the top 10 least affordable places. Conversely, seven of the 10 most affordable local authorities were in Scotland, including East Ayrshire and Inverclyde.
Worked Examples for Homeowners and Potential Buyers
First-Time Buyer
Consider a first-time buyer in London, where the typical borrower has £280,000 of mortgage debt. With a 75% loan-to-value (LTV) ratio, this equates to a property value of approximately £373,333. At the current mortgage rates of 3.75%, their monthly repayment would be around £1,297. This would represent approximately 21.3% of a gross income of £73,000 – the median income in London as of 2025.
Remortgager
For a homeowner in Northern Ireland looking to remortgage, the average mortgage debt is significantly lower at £99,500. Assuming a 75% LTV on a property worth £133,000, and using the current mortgage rate of 3.75%, the monthly repayment would be around £461. This equates to about 18% of a gross income of £30,500 – the median income in Northern Ireland as of 2025.
Market Context
UK Finance found that there were 723,000 UK house purchase mortgages advanced in 2025, a 17% increase year-on-year. This growth occurred despite challenges such as stamp duty surcharges, the progressive removal of income tax relief for mortgage interest, and stricter underwriting standards. All regions of the UK saw growth in buy-to-let purchase activity in 2025, though returns varied widely. Scotland had the highest rental yields, with a gross yield of over 9%, while the lowest returns were scattered across England.
Frequently Asked Questions
What percentage of income did UK homeowners spend on mortgages in 2025?
On average, UK homeowners spent 21.3% of their gross income on mortgage payments in 2025.
Which areas had the highest and lowest mortgage affordability in 2025?
North Norfolk in East Anglia and the London Borough of Hillingdon had the lowest mortgage affordability, with homeowners spending over a quarter of their income on repayments. The most affordable areas were in Scotland, including East Ayrshire and Inverclyde.
How has the number of UK house purchase mortgages changed year-on-year?
There were 723,000 UK house purchase mortgages advanced in 2025, representing a 17% increase from the previous year.
What were the rental yields in Scotland and England in 2025?
Scotland had the highest rental yields in 2025, with a gross yield of over 9%. The lowest returns were found in England, with areas such as South Hams in Devon yielding 5%.
About David Sampson
David Sampson writes about the UK mortgage market for Mortgage118, covering specialist lending, market trends, and practical advice for borrowers. All content is reviewed for accuracy against FCA guidelines and current market data.