Recent analysis reveals a significant shift in the UK mortgage market, with £500,000-plus mortgages increasingly being taken out by buyers outside of London and the South East. This trend indicates a growing affordability challenge as house prices rise across the country.
TL;DR: The number of £500,000-plus mortgages outside London has surged by 18% since 2021; buyers in the Midlands, North, and Scotland are driving this change.
What is driving the rise in £500k mortgages?
According to Savills, the increase in £500,000-plus mortgages is largely attributed to rising house prices that have led to higher borrowing requirements. The Midlands saw a 17% increase in these mortgages, while the North experienced a 16% rise, and Scotland, Wales, and Northern Ireland saw an impressive 28% increase. In contrast, London and the South East experienced declines of 2.4% and 2.3%, respectively.
How has mortgage lending changed recently?
In 2025, a total of 62,391 mortgages of £500,000 or more were issued, representing 5.8% of all mortgage lending. This was a 24% increase compared to 2024, although it remains 9% below the peak observed in 2022. Despite the decline in London, the capital still accounted for 42% of these high-value mortgages.
What does this mean for borrowers outside London?
For borrowers in regions outside London, access to £500,000 mortgages has become more feasible, thanks to greater flexibility in affordability stress testing. This allows higher-earning households to secure larger loans despite the rising costs associated with servicing these mortgages. The annual cost of servicing a new £500,000 mortgage has increased from £25,100 in August 2021 to £34,100 this year, marking a 36% rise.
Frequently asked questions
Why are more people outside London taking out large mortgages?
Rising house prices in regions outside London have led to increased borrowing needs, driving the demand for £500,000-plus mortgages.
What impact do rising interest rates have on mortgage affordability?
Higher interest rates have increased the cost of servicing larger loans, making it essential for borrowers to assess their affordability carefully.