The mortgage market is continuing to hold firm despite rates pushing back above 5%, with homeownership still significantly cheaper than renting across every region of the UK.
New data from TwentyCi’s Q1 2026 Property & Homemover Report shows buyers are paying an average of £493 less per month than tenants, highlighting a growing affordability gap even as borrowing costs remain elevated.
In London, the monthly saving approaches £1,000, underlining the scale of divergence between the two tenures.
The figures expose what the report describes as an “affordability paradox”, where higher mortgage rates have not eroded the relative cost advantage of buying, largely due to sustained pressure in the rental market.
ECONOMIC UNCERTAINTY
Rents now account for 45.5% of median disposable income, pushing more households toward ownership despite tighter affordability constraints and ongoing economic uncertainty.
The data also points to a structural shift in lending, with lenders increasingly stretching loan-to-income (LTI) multiples to bridge the gap.
Following regulatory adjustments, higher income multiples of 5.5x and 6x are becoming more widely available, particularly in higher-value southern markets where affordability pressures are most acute.
Market activity remains steady beneath the surface. New instructions have risen by 5.1% year-on-year, with the South East seeing an 8.9% increase in available stock, supporting a stronger pipeline of transactions.
FALL-THROUGH RATES
At the same time, fall-through rates have dropped by 12.1% compared to 2025, suggesting improved buyer quality and commitment outside of Inner London, even as wider economic pressures persist.
However, transaction timelines continue to lengthen. The average time to exchange has reached 134 days, up seven days year-on-year, increasing the risk of mortgage offers expiring and placing greater pressure on brokers and conveyancers to improve process efficiency.
Regionally, the market remains uneven. While southern markets are feeling the weight of affordability constraints, Northern Ireland continues to outperform, recording annual house price growth of 10%.
“The market is continuing to tick along nicely.”
Colin Bradshaw (main picture, inset), CEO of TwentyCi, says: “Global disruption and fixed rates surging back above 5% have certainly acted as a cooling influence, particularly in London.
“However, we are not seeing a ‘frozen’ market. With supply up 5% and transactions tracking higher than both 2023 and 2024, the market is continuing to tick along nicely.”
And he adds: “The real story for 2026 is the sheer necessity of homeownership; when renting costs nearly 50% of take-home pay, the drive for mortgage approval remains the primary financial goal for UK households.”
BUDGET LIMIT
The rental market is also showing signs of strain. While stock levels have increased sharply, rising 18.8% year-on-year to a six-year high, affordability pressures appear to be capping further growth.
Let-agreed prices fell by 2% in the first quarter, indicating that tenant budgets may have reached their limit despite historically strong yields for landlords.
