Mortgages: Sales of Reach Five-Year High in the UK

Sales of 100% mortgages in the UK have reached a five-year high, with 574 transactions recorded in the first three quarters of 2025. This surge marks a significant recovery from previous years, where only 452 sales were noted in 2021 and a drastic drop to 135 in 2022.

The rise in zero-deposit mortgages is symptomatic of a market in which many buyers are finding it increasingly difficult to save, according to Charlie Evans. The trend highlights the ongoing challenges faced by potential homeowners amid rising property prices.

In December 2025, the average property price across the UK stood at £270,000, with England recording an average price of £292,000, a 1.7% annual growth. Wales saw a more substantial increase of 5.0%, bringing the average price to £215,000, while Scotland’s prices rose by 4.9% to £191,000. Northern Ireland experienced the highest growth at 7.5%, with average prices reaching £196,000.

Despite the increase in mortgage sales, the market is witnessing a decline in mortgage approvals for house purchases, which fell by 3,100 to 61,000 in November 2025. This decline raises questions about the sustainability of the current market dynamics.

The weighted average interest rate on new fixed-term mortgages is currently at 3.46 percent, which may influence buyer decisions in the coming months. Trevor Grant advises that borrowers with maturing fixed rates in 2026 should not wait until their terms expire to act.

Transaction data estimates indicate there were approximately 100,000 UK residential transactions in December 2025, reflecting a 4.7% increase compared to the previous year. This uptick in transactions contrasts with the decline in mortgage approvals, suggesting a complex market environment.

Borrowers could potentially save about €1,000 per year with a 0.5 percentage point differential on a €250,000 mortgage, highlighting the financial implications of current interest rates. Rachel McGovern commented, “It is a difficult one to call,” emphasizing the uncertainty in the market.

As the UK housing market evolves, the Financial Conduct Authority and other entities are closely monitoring these trends. The implications of rising property prices and changing mortgage dynamics will be crucial for both buyers and lenders moving forward.