UK households spent a record £226 billion to keep a roof over their heads last year, figures on Monday showed, with mortgage borrowers striking fixed-rate deals particularly hard hit by the rise in repayments.
Total housing costs have risen by £66 billion in the last five years, a rise of 41%, property group Savills said.
The rate of increase slowed, with spending reaching almost £8 billion, or 3.6%, last year compared to £22 billion in 2023 and £19 billion in 2024.
But Savills identified a particularly large rise in sums paid in mortgage interest, which grew by 9% last year to £53.6bn, representing more than half of the total increase.
The real estate company warned that this trend could continue if the economic turmoil caused by the US and Israeli attacks on Iran triggered persistent inflation.
“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,” said Lucian Cook, head of residential research at Savills.
“Until recently, it looked like 2026 would offer some respite, but that is now less certain given the prospect of another wave of inflation, which mortgage markets typically price in quickly.”
Last week, the average price of a two-year fixed-rate mortgage topped 5%, up from 4.84% at the end of February, and lenders have been busy striking deals and raising rates.
Including regular capital repayments, the bill for 8.8 million mortgage holders reached £114 billion in 2025, Savills said, meaning the average borrower is paying £13,000 a year.
In the rental market, it found costs had risen more slowly, up 2.75% to £112 billion in 2025.
Of the total £226bn, £81bn was paid to private sector landlords, an average of £15,000, while the bill for private renters has risen 27% over the past five years.
London has seen the smallest percentage increase in overall housing costs over that time, at 36%, compared to 49% in the North West and 45% in both the North East and East of England.
However, London still accounts for by far the largest share of Britain’s property costs, at 23.4% of the total.
According to property website Rightmove, new sellers’ asking prices have risen by an average of £3,023 in March to £371,042, a “typical” seasonal rise of 0.8%. The number of homes for sale remains at an 11-year high for this time of year, limiting more significant price growth.
Rightmove said the market was “stable” despite the global uncertainty created by the Iran conflict, with sales numbers just 2% behind last year’s strong market and 5% ahead of 2024.
