Mortgages in the United Kingdom (UK) - statistics & facts

Mortgage rates in the UK were on a downward trend for more than a decade, improving the affordability of housing loans but also fueling demand and price growth. Under the pressure of soaring inflation, the Bank of England started a series of interest rate hikes in 2022, leading to a dramatic increase in interest rates and a heavier financial burden for homebuyers. Higher interest rates make it harder for homebuyers to get on the property ladder and are an issue for homeowners with loans up for renewal. That was the case for 1.4 million fixed-rate mortgages with a mortgage deal ending in 2023. Most homeowners are expected to face a monthly increase of repayments of less than 99 British pounds. Nevertheless, for more than a million borrowers this figure is projected to exceed 300 British pounds by the fourth quarter of 2026.

Importance of the mortgage market

Mortgages have been around for centuries. They are a major macroeconomic driver and a crucial mechanism for the transmission of monetary policies. Without the mortgage market, acquiring a home would be impossible for most people aspiring to have one of their own. Although the UK has one of the lowest homeownership rates in Europe, it is the largest residential mortgage market. That comes as no surprise since the predominant share of homeowners relies on a mortgage for home financing. In 2022, there were just over 1.1 million mortgage sales in the UK, with remortgages accounting for the largest share of loans, followed by first-time home purchases and repeat purchases. The average mortgage loan size has increased in recent years and stood at just over 190,000 British pounds in the third quarter of 2023. Mortgages vary in their interest rate and return period. A fixed interest rate is simply a mortgage with a fixed repayment rate, while the variable rate fluctuates over time depending on an underlying benchmark defined by the lender. Generally, the majority of UK mortgages are at a fixed rate.

How is the market going to develop in the coming years?

The rise in mortgage rates has naturally led to the market contracting and new mortgage lending decreasing. Over just a few months between August 2022 and January 2023, the number of mortgage approvals, including house purchases and remortgaging, halved. That downward trend is forecast to continue until 2024, affecting both private individuals and landlords. However, how the market develops is mainly dependent on inflation and the base interest rate.
This text provides general information. Statista assumes no liability for the information given being complete or correct. Due to varying update cycles, statistics can display more up-to-date data than referenced in the text.
Published by Statista Research Department, Dec 20, 2023

Key insights

Outstanding residential mortgage lending
1.9tr EUR
Number of mortgage sales
1.2k
Homeownership rate
65.1%
Get more insights

Editor’s Picks Current statistics on this topic

Average interest rates for mortgages in the United Kingdom (UK) from March 2000 to January 2024, by type of mortgage

Mortgages & Financing

Average mortgage interest rates in the UK 2000-2024, per quarter and type

Total value of gross mortgage lending in the United Kingdom (UK) from 2007 to 2022 (in billion GBP)

Mortgages & Financing

Gross mortgage lending in the UK 2007-2022

Average value of mortgages granted in the United Kingdom (UK) from 1st quarter 2016 to to 3rd quarter 2023 (in 1,000 GBP)

Mortgages & Financing

Average value of mortgages granted in the UK 2016-2023, per quarter

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Further reportsGet the best reports to understand your industry

Mortgage industry of the United States
Mortgage industry of the United States
Residential real estate in the United Kingdom
Residential real estate in the United Kingdom
Mortgages in the United Kingdom (UK)
Mortgages in the United Kingdom (UK)
Mortgage market in Western European countries
Mortgage market in Western European countries
Residential real estate in Europe
Residential real estate in Europe
Global mortgage industry: developed markets
Global mortgage industry: developed markets
Mortgages in Japan
Mortgages in Japan

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