New data reveals that the North West of England has seen the UK’s steepest rise in housing costs over the last five years. While the national average increase stood at 41%, the North West surged by 49%, and the North East followed closely at 45%. This regional shift highlights how the rising cost of living is penetrating areas traditionally considered more affordable.
The cumulative UK housing bill hit £226 billion last year, with mortgage holders bearing the brunt of the increase. Those finishing fixed-rate terms found themselves facing a new reality of much higher monthly repayments. These “refinancing shocks” have added billions to the collective debt service of British households.
Total mortgage payments, including capital and interest, reached £114 billion for approximately 8.8 million homeowners. This equates to an average annual cost of £13,000 per borrower. Meanwhile, private renters saw their total bill rise to £81 billion, highlighting the dual pressure on both sectors of the market.
Economists are watching the “inflationary wave” caused by global instability very closely. Strikes in the Middle East have created ripples in the mortgage market, causing lenders to price in future risks. This has led to the withdrawal of several competitive mortgage products in favor of higher-interest alternatives.
Despite the daunting figures, the housing market shows signs of stability in terms of transaction volume. Sales are currently 5% higher than they were in 2024, showing that people are still moving despite the costs. The abundance of choice for buyers is currently keeping asking price growth to a modest 0.8% monthly increase.