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Mortgage affordability at tightest level since 2008, says UK Finance

ended 05. May 2026

Analysis by trade body, UK Finance, has showed significant regional variation in how much of their gross household income borrowers commit to initial mortgage repayments - a key measure of affordability.

At a UK level, homebuyers spend on average just over a fifth (21.3 per cent) of their gross income – the highest level since 2008. 

At a Local Authority level, borrowers in two places – North Norfolk in East Anglia (25.7 per cent) and the London Borough of Hillingdon (25.1 per cent) – spent over a quarter of their gross income on mortgage repayments. 

The remaining eight of the top 10 least affordable places were in the London commuter belt, in places like Luton (24.9 per cent), Slough (24.8 per cent) and Spelthorne (24.8 per cent).

At the other end of the scale, seven of the 10 most affordable Local Authorities were in Scotland, in places like East Ayrshire and Inverclyde, with borrowers there needing almost nine percentage points less of their gross income to cover initial mortgage payments compared with those borrowing in North Norfolk.

Although the City of London is predominantly a business district with limited residential stock, its high‑earning buyer profile means it ranks among the most affordable areas on this measure.

Have a read of the report >> here << and send your views ASAP.

6 responses from the Newspage community

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Editor
Emma JonesVerified
Managing Director at Whenthebanksaysno.co.uk
Affordability is an evergreen challenge for borrowers given historical house price growth and the ongoing lack of supply. The good news is that there are many lenders with different ways of overcoming this hurdle, and borrowers should not think they are priced out as there are usually options. Many people are surprised at the choices that are now available to them, as lenders have innovated a lot in recent years to address this issue.
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Shaun SturgessVerified
Director at Sturgess Mortgage Solutions
The national picture from UK Finance is stark, but in South Wales the affordability story has its own distinct challenges. Swansea and the surrounding areas have historically offered some of the best value in the UK, yet we're seeing that advantage steadily eroded, not by fundamentals, but by how properties are being brought to market.
A growing concern is the influx of self-employed estate agents with limited experience and little grasp of genuine local values. Properties are increasingly listed at aspirational prices rather than evidence-based ones, distorting comparables and pushing affordability metrics in the wrong direction. When sellers across a postcode all benchmark against inflated listings, the whole market drifts upwards without any real economic justification.
For local buyers, particularly first-time buyers, this means working harder to afford homes that shouldn't be priced this way. Accurate, research-led valuations aren't just good practice; they're essential to keep
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Stephen PerkinsVerified
Managing Director at Yellow Brick Mortgages
Mortgage affordability is riding the same rollercoaster as general household affordability. Sadly it just keeps getting steeper. Costs of everything are climbing far quicker than incomes and there is only so much that can be cut back on, which most households would have done by now. These figures show a large contrast on areas worse effected but also highlights the benefit getting professional advice on what, for most, is their largest monthly outgoing.
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Martin RaynerVerified
Financial Adviser at Compton Financial Services
Rising mortgage costs are only part of the pressure on homeowners. Alongside higher rates, borrowers face rising living costs and a growing tax burden, all tightening household finances year on year.

For those remortgaging in particular, repayments have increased significantly, and the full impact may not yet be felt. With potential tax rises, higher council tax and persistent inflation, there is real uncertainty over how much more households will be squeezed, particularly with global pressures that could push costs even higher.

Affordability may still work on paper, but in reality there is less room for error, and the direction of travel is clear: increasing pressure on incomes. It is difficult to see this continuing without some wider impact on household finances or the housing market.
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Craig FishVerified
Director at Lodestone Mortgages
A fifth of your gross salary going on a single monthly payment before you've paid a bill, bought a week's food or put fuel in the car. That's where the average UK homebuyer sits right now, and in parts of the commuter belt it's closer to a quarter. These aren't people living beyond their means. These are people trying to get on the housing ladder at the worst time in a generation.
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Bob SinghVerified
Founder at Chess Mortgages
Balancing income with mortgage payments has always been a challenge with so many variable that can alter the formula overnight.

Whilst we would all love to live in mansions one has to balance lifestyle against working 24/7 just to pay a mortgage. Lenders have the final say of a maximum loan and that should remain in place.

The figures mentioned in the report mention payments as a % of gross income but taxation also needs consideration.

For a £50k pa earner the gross monthly is £4167 and net £3293. Is the mortgage is £1042 representing 25% of gross income them it works out to be 31% of net pay. For a £75k pa earner the figures are then £6250 gross and £4504 net. Then the mortgage would be £1562 representing 25% of gross income and 35% of net income.

Lenders’ Debt to Income ratios allow more so this indicates that mortgages are still relatively affordable at current rates and affordability should improve as rates fall over time