Mortgage affordability has reached its tightest level since 2008 with borrowers now spending more than a fifth of their income on repayments and sharp regional differences emerging across the UK.
New data from UK Finance shows that the average homebuyer now commits 21.3% of gross household income to mortgage costs, the highest proportion in nearly two decades.
The figures come as lending activity picks up, with 723,000 house purchase mortgages advanced in 2025, a 17% increase year-on-year, highlighting continued demand despite affordability pressures.
In North Norfolk and the London Borough of Hillingdon are spending more than a quarter of their income on repayments, at 25.7% and 25.1% respectively.
GEOGRAPHICAL DIVIDE
Much of the remaining least affordable locations are concentrated in the London commuter belt, including Luton, Slough and Spelthorne.
In contrast, affordability is strongest in Scotland, which accounts for seven of the ten most affordable local authority areas. Buyers in locations such as East Ayrshire and Inverclyde are spending around 17% of their income on repayments, significantly lower than in southern England.
The report also highlights divergence in the buy-to-let sector, where yields are strongest in Scotland at close to 10%, compared to around 5% in parts of England such as South Hams and Cambridge.
Meanwhile, London continues to carry the highest borrowing burden, with average mortgage debt reaching £280,000, reflecting the capital’s elevated property values.
AFFORDABILITY IMPACT
James Tatch (main picture, inset), Head of Analytics at UK Finance, says: “It’s been challenging times for those trying to buy a property in recent years, 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 and if you’re a landlord, how profitable your investment property is.
“The UK housing market faces both challenges and opportunities at a national and local level, and understanding these local markets enables better decision making from government, local authorities and others. We look forward to continuing our work with these stakeholders to improve the mortgage market.”
LOCKED OUT
Mary-Lou Press, President of NAEA Propertymark (National Association of Estate Agents), says: “Higher interest rates and the challenge of saving for a deposit mean many people who could afford monthly repayments are still locked out of buying.
“It’s no longer just about income; access to upfront cash is becoming the biggest barrier.
“Property professionals are also seeing clear regional differences. In more affordable parts of the UK, buyers are still active, but in higher-value areas such as London and the South East, stretched affordability is having a much greater impact, slowing activity and forcing buyers to adjust expectations.”
STRONG DEMAND
She adds: “There’s still strong demand to own a home, but without changes to lending rules and more homes being built, many first-time buyers may continue to struggle to get on the ladder.”
And Joe Pepper, UK CEO of PEXA, says: “This report highlights how much the homebuying experience varies across the UK, underlining the importance of understanding local markets to support better decision-making.
“As the industry continues to digitise, there is a real opportunity to create a more efficient, transparent and responsive housing market for borrowers across the country.”
