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Report
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Mortgage ownership has remained fairly consistent, with just over a fifth of UK adults owning their property with a mortgage. Affordability challenges remain despite real wage growth and interest rates…
The UK mortgage market experienced a mixed performance in recent years, with a notable decline in 2023, primarily due to high interest rates and affordability challenges.
However, in 2024, the market rebounded after a steep decline in 2023, with a more than 7% increase in gross mortgage lending, reaching more than £200 billion, largely driven by house price growth and slight improvements in affordability. Historic data from the UK Mortgages Market Report shows fluctuations in gross mortgage lending, with last year marking a recovery but still falling short of pre-pandemic levels. The mortgage market forecast indicates long-term growth, with almost 30% cumulative increase, reaching a significant value, driven by anticipated interest rate cuts and regulatory adjustments. Despite this, the persistent rise in house prices and the need for larger deposits will continue to challenge affordability for first-time buyers (FTBs), with the housing supply shortage exacerbating the situation.
UK Mortgages Market Trends
Consumer trends in the UK mortgage market reveal a strong interest in green mortgages, with the majority of first-time buyers (FTBs) expressing interest in environmentally friendly options. Over two-thirds of mortgage owners are focused on securing low interest rates and minimising fees, with affordability being a key concern. More than half of renters are saving for a home deposit, but rising rents and house prices continue to delay purchasing plans. Mortgage switching and refinancing remain common with remortgage and product transfer activity accounting for almost half of total mortgage activity. However, a third of mortgage owners switched to a new deal with their existing lender, while only a portion transferred to a new lender. Additionally, younger generations, particularly millennials, are the most active group in pursuing homeownership, despite concerns about long-term affordability with nearly half of mortgage owners who have not yet retired concerned about paying off mortgages into retirement.
Purchasing the UK Mortgages Market Report 2025 would give access to the insights into trends like the growing demand for green mortgages and the focus on affordability. It highlights opportunities for lenders to improve affordability measures, offer innovative products like green mortgages and family-backed mortgages, and enhance communication about expanded lending criteria.
About The Report
The UK Mortgages Market Report 2025 provides comprehensive insights into the current state and future trends of the UK mortgage market, including consumer behaviour, affordability challenges, and the rising demand for green mortgages. It covers key areas such as mortgage lending performance, market dynamics, consumer preferences, and the impact of economic factors like interest rates and house prices. The report surveys a wide range of factors including consumer attitudes, lender strategies, and regulatory changes. Financial institutions, mortgage lenders, real estate developers, and policymakers will benefit from this mortgages market report, gaining valuable data to refine their strategies, improve customer engagement, and stay ahead in a competitive mortgages market.
Key Topics Analysed in the Report
The impact of the economic climate and regulation on mortgages
Market size and performance, including a five-year market forecast
Market share of the leading mortgage lenders
Recent mortgage activity and reasons for arranging a new mortgage deal
Consumer intentions in arranging a mortgage product in the next two years
Preferred term length for fixed-rate mortgage products among prospective homeowners
Mortgage owners’ satisfaction with their current mortgage lender and the importance of low fees being offered by lenders
Non-mortgage owners’ concern about affordability and how stamp duty changes have altered their mortgage plans in the next year
Mortgage owners’ consideration of extending mortgage terms and level of concern with payments still being made into retirement
Meet the Expert Behind the Analysis
This report was written by Lewis Cone. Lewis joined Mintel in May 2013 having graduated from the University of Southampton with a 2.1 BSc (Hons) degree in Economics and writes a range of industrial reports, from occupational health to the house building market.
Mortgage affordability is improving. However, rising house prices and stamp duty changes remain major challenges and require innovative solutions from lenders.
Lewis Cone
Associate Director – Financial Services
Collapse All
EXECUTIVE SUMMARY
Opportunities for the mortgages market
Promote green mortgages to FTBs delaying buying plans
Revamp product rewards and incentives
Promote expanded affordability measures to those currently saving
Market dynamics and outlook
Market size & forecast
Market predictions
Interest rate cuts and easing inflation help mortgage lending to rise
Graph 1: gross mortgage lending to individuals, 2018-24
Lower rates will support growth in the mortgage lending market
What consumers want and why
Mortgage activity dominated by switching deals and new purchases
Graph 2: reason for last mortgage arrangement, 2025
Buying intentions remain strong
Graph 3: mortgage plans for the next two years, 2025
Low mortgage interest rates and product fees dictate lender choice
Graph 4: motivators behind choice of mortgage lender, any rank, 2025
Lenders need to do more to meet the needs of mortgage owners
Graph 5: attitudes of mortgage owners, 2025
Affordability and lifestyle preferences affect homeowner ambitions
Graph 6: attitudes of non-homeowners, 2025
Advertising and marketing
Mortgage advertising spend falls for first time since 2021
Graph 7: total above-the-line, online display and direct mail advertising on mortgages, excluding equity release, 2020-24
Leeds Building Society helps people find a sense of belonging
Competitive strategies and launch activity
Lenders adjust affordability calculations to widen access to mortgages
MARKET DYNAMICS
Market size
Interest rate cuts and easing inflation help mortgage lending to rise
Graph 8: gross mortgage lending to individuals, 2019-24
Affordability challenges continue to dampen mortgage lending
Outstanding mortgage balances reach data record high
Graph 9: gross outstanding lending secured against residential properties, 2015-24
Mortgage arrears continue to rise
Market forecast
Lower rates will support growth in the mortgage lending market
Mortgage rates fall in the immediate aftermath of US tariffs
Increased competition expected in remortgage sector
Mortgage lending expected to grow, but affordability challenges will persist
Market segmentation
House purchases reach a three-year high in mortgage lending share
Graph 10: segmentation of gross mortgage lending, 2018-24
Recovery in loan approvals supports growth in house purchase lending
Graph 11: monthly number of approvals to individuals, by purpose, 2019-25
Remortgaging lending falls, but is likely to recover over the year
Gross advances by LTV ratios remain consistent
Graph 12: LTV ratios for mortgage lending, 2020-24
Market share
Lloyds boasts the largest outstanding mortgage portfolio
Six lenders account for 70% of outstanding mortgage balances
Advisers remain integral to mortgage sales
The housing market
Average UK house price has risen 94% in the last 20 years
Graph 13: average house price, 2005-25
Average house prices rise in line with the falling base rate
Real wage growth sees a fall in house price to income ratio
Graph 14: ratio of median house price to median gross annual earnings, England and Wales, 1997-2024
Residential property transactions fall for second consecutive year
Graph 15: residential property transactions over £40,000, 2016/17-23/24
Mortgage rates remain elevated despite base rate cuts
Graph 16: monthly interest rates of UK MFIs for selected types of mortgage, 2018-25
Building activity remains well below government targets
Graph 17: number of permanent dwellings started and completed, 2000/01-2023/24
Average monthly rents continue to rise
Graph 18: private rental prices, 2018-25
Spiralling rents make saving for a deposit challenging
Macro-economic factors
UK GDP rose in 2024, but uncertainty is on the horizon
Graph 19: quarterly GDP growth, Q1 2022-Q4 2024
Interest rates are heading down, but borrowing costs remain high
Sticky inflation could add to mortgage affordability concerns
Graph 20: RPI and CPI inflation rate, 2021-25
Impact of the ‘liberation day’ trade tariffs
Consumer sentiment: wellbeing recovery stagnates
Graph 21: the financial wellbeing index, 2020-25
Consumer confidence is improving, but trade tariff pressures loom
Graph 22: the financial confidence index, 2020-25
Most people are still noticing the effects of higher prices
Graph 23: issues faced in the last two months, 2025
Legislation and regulation
Stamp duty changes bring extra costs to homeownership
Mortgage Charter continues to benefit borrowers
FCA sets out steps to improve mortgage accessibility
Loan-to-income lending threshold may be changed
WHAT CONSUMERS WANT AND WHY
Mortgage ownership
Mortgage ownership remains stable
Core target group are most likely to privately rent
Graph 24: housing situation, by age, 2025
Renters’ tight finances make the path to homeownership a tough prospect
Graph 25: financial situation, by housing situation, 2025
Mortgage activity
Mortgage activity dominated by switching deals and new purchases
Graph 26: reason for last mortgage arrangement, 2025
Almost a third arranged their last mortgage within the last year
Graph 27: time of last mortgage arrangement, 2025
Mortgage owners remain loyal to existing lenders when refinancing
Type of mortgage held
Stability offered by fixed-rate products appeals in uncertain times
Graph 28: types of mortgage currently held, 2025
Fixed-rate mortgages are the most popular
Mortgage intentions
Homeownership ambitions remain robust among younger millennials
Buying intentions remain strong
Graph 29: mortgage plans for the next two years, 2025
Stability remains central to mortgage plans
Mortgage market uncertainty has piqued interest in longer fixes
Graph 30: preferred fixed-rate mortgage term length, 2025
Promote longer-term fixed-rate products to FTBs
Graph 31: preferred fixed-rate mortgage term length, by mortgage intentions in the next two years, 2025
Satisfaction with mortgage lender
Most mortgage owners are satisfied with their lender
Engage with struggling customers to remove any lingering doubts
Graph 32: overall satisfaction with current mortgage lender, by financial situation, 2025
Factors behind choice of mortgage lender
Low mortgage interest rates and product fees dictate lender choice
Graph 33: motivators behind choice of mortgage lender, 2025
Cost-conscious customers place highest value on lowest rates and product fees
Increase product flexibility to attract younger homeowners
Graph 34: reduce/pause repayments and portability as motivators behind lender choice – any rank, by age, 2025
Enhance product reward offerings to boost perceptions of value
Attitudes of mortgage owners
Lenders need to do more to meet the needs of mortgage customers
Graph 35: attitudes of mortgage owners, 2025
Actively engage with mortgage owners to ensure product suitability
Short-term confidence, but long-term concerns with repayments
Graph 36: mortgage repayment attitudes and mortgage term plans, by age, 2025
Introduce energy efficient product add-ons to make the most of strong demand
Energy efficiency and sustainability appeal to younger homeowners and non-homeowners
Support borrowers to research their options for new mortgage deals
Attitudes of non-homeowners
Affordability and lifestyle preferences affect homeowner ambitions
Graph 37: attitudes of non-homeowners, 2025
Renting suits lifestyles, but homebuying ambitions remain
Stamp duty and interest rates have delayed plans
Graph 38: high interest rates and stamp duty changes have affected my mortgage plans, by age, 2025
Graph 39: currently saving for a deposit for a home, by age, 2025
Promote products and tools to help saving for a deposit
INNOVATION AND MARKETING TRENDS
Competitive strategies
Lenders adjust affordability calculations to widen access to mortgages
Mortgage rate competition heats up as tariffs impact interest rate expectations
Barclays’ Mortgage Boost extends borrowing limits without a larger deposit
Nationwide reduces income requirement for its Helping Hand offering
Launch activity and innovation
Hinckley & Rugby launch remortgage range with no early repayment charges
April Mortgages launches zero deposit, 10-to-15 year fixed-term mortgage
NatWest’s Family-Backed Mortgage aims to assist FTBs
Skipton launches ‘zero repayment’ mortgage for FTBs
Eco Home Mortgage looks to appeal to sustainability-minded homeowners
Barclays launches zero deposit mortgage under Right to Buy
Advertising and marketing activity
Mortgage advertising spend falls for first time since 2021
Graph 40: total above-the-line, online display and direct mail advertising on mortgages, excluding equity release, 2020-24
Largest banking groups account for the majority of advertising spend
Social and digital advertising attract greatest focus from mortgage providers
Graph 41: proportional distribution of above-the-line, online display and direct mail adspend on mortgages, by media type, 2020-24
Leeds Building Society strives to help people find a sense of belonging
Barclays stresses the value of human connection to simplify mortgages
MPowered Mortgages promotes speed and tech use to boost brand awareness
West Brom Building Society looks to boost support for FTBs
APPENDIX
Report scope and definitions
Market definition
Abbreviations and terms
Market forecast data and methodology
Market forecast and prediction intervals (value)
Forecast methodology
Forecast – note on US trade disruption
Consumer research methodology
Nielsen Ad Intel coverage
Supplementary data
Gross mortgage lending segmentation
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