Lower mortgage rates and rising wages ease pressure on borrowers
Mortgage finance has become more accessible for UK borrowers, with the proportion of income spent on mortgage payments falling to its lowest point in nearly three years, according to new figures from mortgage and protection network Stonebridge.
Its latest Mortgage Affordability Index indicates that, in September, the typical mortgage accounted for 34.3% of an average borrower’s salary. This marks the lowest level since November 2022. The figure represents a decrease from 34.6% in August and a significant drop from 40% recorded in the same month last year.
The improvement in affordability has been attributed primarily to a reduction in mortgage rates, which have declined by 57 basis points over the past year to an average of 4.19%. In addition, annual wage growth of 4.75% has contributed to easing the burden on borrowers.
“Mortgage affordability has improved significantly over the past year, reaching its most favourable level since late 2022,” said Rob Clifford (pictured right), chief executive at Stonebridge. “Falling mortgage rates, alongside rising wages, mean borrowers are spending a smaller share of their income on housing—a welcome relief for first-time buyers and those looking to move.
“Looking ahead, the Bank of England is expected to cut rates in December. While fixed rate mortgages are priced off swaps rather than the base rate, a lower-rate environment could encourage lenders to bring more competitive deals to market. This suggests affordability could continue to improve into 2026, provided house prices don’t rise unexpectedly.”
Stonebridge’s affordability index is based on a combination of official wage data, mortgage rate statistics, and the network’s own lending figures to assess how affordable mortgage finance is for the average borrower. Stonebridge arranges more than £13 billion in mortgage lending each year.
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