UK homebuyers face worst mortgage affordability since 2008, data shows
- company UK Finance
- location Bedfordshire
- location Berkshire
- location London
- location Norfolk
- location Scotland
- location UK
- person James Tatch
UK homebuyers are facing the worst mortgage affordability pressures in nearly two decades, with initial repayments consuming more than a fifth of gross income, according to industry data. The strain coincides with a separate economic shock: an Iranian ballistic missile strike on Qatar’s main gas complex that has disrupted global energy markets.
The banking body UK Finance reported that initial mortgage repayments reached 21.3% of a homebuyer’s gross income at a nationwide level in 2025, the highest level since 2008 [1]. The data does not account for the economic fallout from the Iran conflict, which has pushed up mortgage costs further [1].
Regional disparities were stark. North Norfolk and the west London borough of Hillingdon were the least affordable areas, with homebuyers spending over 25% of their gross income on repayments [1]. Eight of the ten least affordable locations fell within the London commuter belt, including Luton, Slough, and Broxbourne [1].
At the other end, seven of the ten most affordable local authority areas were in Scotland. East Ayrshire and Inverclyde topped the list, with average homebuyers committing 17% of gross income to mortgage repayments [1]. The City of London ranked as the third most affordable area, a result UK Finance attributed to buyers there typically being in the highest-earning income brackets [1].
James Tatch, head of analytics at UK Finance, said affordability pressures had been challenging but were not distributed evenly. “Property prices, wages and demographics vary greatly across and within regions. All of these have an impact on affordability,” he said [1].
Meanwhile, an Iranian ballistic missile struck the Ras Laffan gas complex in Qatar, knocking out 17% of global LNG supply [2]. The attack cost QatarEnergy $20bn in lost annual revenues and disrupted supplies to key Asian markets [2]. The broader conflict has caused up to $58bn in damage across the Gulf, with more than 80 facilities hit since the US and Israel launched strikes on Iran [2].
The World Bank cut its growth forecast for the Middle East to 1.8% this year, warning the fallout could result in long-term economic scarring [2].
real-estate