UK homebuyers are experiencing the worst mortgage affordability pressures in almost two decades, according to new data from the banking body UK Finance. The figures show that initial mortgage repayments are now consuming more than a fifth (21.3%) of a homebuyer's gross income on average across the country, the highest level since 2008.
The data, which covers 2025, does not account for the economic impact of the Iran war that began in February. The conflict has pushed up mortgage costs, with many borrowers facing hundreds or thousands of pounds more in repayments. However, fixed-rate mortgage pricing has shown a gradual downward trend in recent weeks.
Regional disparities are stark. The least affordable areas are concentrated in the London commuter belt: north Norfolk (25.7% of income), Hillingdon (25.1%), Luton (24.9%), Slough (24.8%), Broxbourne (24.4%), and Harlow (24.2%). In contrast, seven of the ten most affordable local authorities are in Scotland, with East Ayrshire and Inverclyde topping the list at 17%.
The City of London ranks as the third most affordable area, a 'quirk' according to UK Finance, because buyers there tend to be high earners. Despite affordability pressures, mortgage activity remained robust in 2025, with 723,000 loans advanced – a 17% increase from 2024.
James Tatch, head of analytics at UK Finance, noted that 'the pain is not felt equally across the country,' citing variations in property prices, wages, and demographics. He added that the past few years have been challenging for prospective buyers, with affordability pressures weighing heavily on the market.
