Savills says higher mortgage costs are now filtering through fixed-rate roll-offs
UK households spent a record £226 billion on housing in 2025, according to new analysis by Savills, covering private and social rents as well as owner-occupier mortgages.
Savills said the total rose by £8 billion over the year, a 3.6% increase, and was £66 billion higher than five years earlier — a 41% rise. However, it noted that the annual uplift has slowed markedly from the increases recorded in 2023 and 2024.
“The pace of growth in the nation’s housing costs has slowed substantially compared with 2023 and 2024,” said Lucian Cook, head of residential research at Savills. “In 2025, the burden of higher mortgage costs has been felt mainly by households coming off longer‑term fixed‑rate deals. At the same time, we’ve seen a return to much more normal levels of rental growth.
“In a market where homeowners are fixing their mortgages for longer, the impact of higher interest rates on housing costs – and on households’ ability to spend elsewhere in the economy – tends to have a much longer tail.
“Until recently, 2026 looked set to offer some respite, but that is now less certain given the prospect of another wave of inflation, which mortgage markets are typically quick to price in.”
| Increases for mortgage homeowners vs renters | |||
|---|---|---|---|
| 2025 total UK housing bill (£m) | 1 year change (£m) | 5 year change (£m) | |
| Mortgage interest | 53,694 | +4,475 | +26,717 |
| Regular mortgage repayments | 60,660 | +369 | +14,465 |
| Total owner occupier costs | 114,354 | +4,844 | +41,182 |
| Private rent | 81,106 | +1,937 | +17,276 |
| Social rent | 30,872 | +1,113 | +7,583 |
| Total renters | 111,978 | +3,050 | +24,859 |
| All Households | 226,332 | +7,894 | +66,041 |
| Source: Savills Research | |||
For the UK’s 8.8 million mortgaged owner-occupiers, Savills put the 2025 bill at £114 billion, equating to an average of £13,000 a year per household. The firm said the latest increase was mainly driven by mortgage interest, which rose 9% over the year from £49 billion to £54 billion. Over five years, it said mortgage interest has doubled, while capital repayments have increased more slowly, leaving total costs for mortgaged households up 56% over the period.
Renters paid an estimated £112 billion in 2025, Savills said, including £81 billion to private landlords. It calculated the average annual cost for a private renting household at £15,000, and said the total amount paid by private renters has increased 27% over five years.
Savills also highlighted regional differences. London recorded the smallest percentage rise in housing costs over the past five years, at 36%, while Northern Ireland saw the largest increase, at 55%.
Despite the slower growth rate, the firm said London’s housing bill remains substantial — broadly comparable to the combined total across Scotland, the North East, the North West, and Yorkshire and the Humber — and accounts for just under a third of the UK’s private rental spend.
| Regional distribution of housing costs | ||||
|---|---|---|---|---|
| Region | 2025 housing cost (£m) | % of total | 5-year change (£m) | 5-year change % |
| London | 53,048 | 23.4% | +13,967 | +36% |
| South East | 38,750 | 17.1% | +11,020 | +40% |
| East of England | 24,203 | 10.7% | +7,510 | +45% |
| South West | 17,748 | 7.8% | +5,045 | +40% |
| West Midlands | 14,949 | 6.6% | +4,440 | +42% |
| East Midlands | 12,774 | 5.6% | +4,070 | +47% |
| North West | 19,682 | 8.7% | +6,483 | +49% |
| Yorks & Humber | 12,641 | 5.6% | +3,451 | +38% |
| North East | 6,231 | 2.8% | +1,944 | +45% |
| Scotland | 14,477 | 6.4% | +4,257 | +42% |
| Wales | 6,972 | 3.1% | +2,139 | +44% |
| Northern Ireland | 4,855 | 2.1% | +1,715 | +55% |
| Total | 226,332 | 100% | +66,041 | +41% |
| Source: Savills Research | ||||
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