Younger populations and rising property values contribute to growing home loan balances
South West London holds the highest mortgage debt per household in the UK, reflecting growing affordability pressures amid high property prices and elevated interest rates, new analysis has revealed.
Bridgingfinancelondon.com examined data from UK Finance to identify local authorities with the most significant mortgage burdens. The study calculated the average mortgage debt by dividing the total value of outstanding residential mortgage loans by the number of households in each local authority.
South West London topped the list with an estimated mortgage debt per household of £109,134.39. This figure was based on a total loan balance of around £41.7 billion distributed across nearly 382,000 households.
Kingston upon Thames followed in second place, recording an average household mortgage debt of £95,614.50. The borough had £22.8 billion in outstanding mortgage loans across approximately 238,000 households.
East Central London ranked third, with an average mortgage debt per household of £91,374.77, derived from a loan total of around £1.4 billion divided among just under 16,000 households. Bromley and Watford completed the top five, with estimated average mortgage debts of £82,813.18 and £78,409.59, respectively.
The findings come as more UK homeowners are taking on higher levels of mortgage debt. An analysis of the Financial Conduct Authority’s latest Financial Lives Survey shows that the proportion of homeowners with more than £300,000 remaining on their mortgage rose from 5% in 2017 to 9% in 2024. The increase is particularly stark in London, where the share surged from 17% to 28% over the same period.
“Areas with higher house prices typically have higher levels of mortgage debt, because the amount you take out for your mortgage loan is directly tied to the cost of the house that you’re buying,” Matthew Archer, managing director of bridgingfinancelondon.com. “Additionally, some areas may be more likely to have fixed mortgage rate deals, which ensure a consistent repayment rate, as opposed to variable rate deals that increase in interest, adding to the amount of debt a homeowner owes.”
He also highlighted that the age demographics of a region can influence average debt levels, with younger populations — common in London — likely to carry more outstanding debt than older homeowners in regions like Wales.
“Since London and the surrounding areas are home to many young working professionals, they will be less likely to have paid off a significant chunk of their mortgage. On the other hand, according to 2023 ONS figures, Wales had the oldest population in the UK, which could explain why no Welsh areas appear in the top 50 national ranking,” he said.
Archer advised prospective buyers and existing homeowners to assess affordability carefully and secure fixed rate mortgage products where possible. “If you're a prospective homeowner, it’s important to remember that a lower mortgage debt starts with buying a property that is more affordable and suits your financial situation,” he added. “All homeowners should ensure that they are on the best rate possible. Fixed rate mortgages that last for as long as possible are ideal, as you pay a set rate for a determined period of time without changes in interest.
“While mortgage repayments can be daunting and significantly impact your finances, there are ways that you can make them more manageable. If you are unsure about your current mortgage rate or are struggling with the cost, speak to a mortgage broker or advisor, as they will search the market and potentially be able to find you better deals.”
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