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UK Home Ownership Trends: Mortgage-Free Households on the Rise
New government data indicates a significant rise in mortgage-free home ownership across the UK. The latest Family Resources Survey from the Department for Work and Pensions reveals that in the fiscal year 2023/2024, outright homeowners represented 37 percent of all households, highlighting a notable trend in the housing market.
This figure surpasses the 28 percent of residences owned with a mortgage, underscoring an expanding divide between those who possess their properties outright and those still paying off loans.
Over the last decade, outright homeownership has increased from 33 percent to the current 37 percent of households. Conversely, mortgaged homeownership experienced a decline between 2013/2014 and 2016/2017, dropping from 31 percent to 28 percent, and has since shown minor fluctuations between 28 and 29 percent.
Expert Analysis on Mortgage-Free Homeowners
Chris Sykes, mortgage technical manager at broker Private Finance, stated that the increase in outright homeowners is unsurprising and anticipates this proportion will continue to grow.
Sykes attributes this trend to individuals with substantial cash reserves securing mortgages when interest rates were low, enabling them to allocate funds elsewhere.
As rates increased, these homeowners found it relatively straightforward to settle their mortgage debts.
Sykes added, “Many individuals opted for mortgages primarily due to low rates, not out of necessity.”
“I expect the proportion of outright owners to increase further in the coming year as sub-2 percent mortgages conclude and homeowners evaluate their next পদক্ষেপs.”
Nicholas Mendes, technical manager at broker John Charcol, suggests that the growing number of outright homeowners may explain the resilience of property prices despite recent economic uncertainties.
Mendes explained, “With a larger segment of households owning outright, a considerable portion is shielded from interest rate fluctuations. They are not directly affected by mortgage expenses, thereby lessening the impact of Bank of England interventions.”
“While interest rates remain relevant, this factor could elucidate why certain segments of the housing market and the broader economy are demonstrating more robustness than anticipated.”
Mortgage Payment Trends
Average Mortgage Payments in 2023/24
Data indicates that the average mortgage payment in 2023/24 was £175 per week.
London residents experienced a notable surge, with a 17 percent rise in median mortgage repayments compared to the previous year.
The average repayment in London stands at £1,291 every four weeks, compared to a UK-wide average of £758.
Households in the North East region have the lowest mortgage repayments, averaging £520 every four weeks.
Rental Costs Versus Mortgage Payments
For private renters in London, the median rent is £1,443 every four weeks, exceeding the average mortgage payment in the capital.
Renters in London are paying 11 percent more than the previous year.
Across the UK, the median rent is £734 every four weeks.
In most regions, median mortgage payments slightly exceeded median private sector rents, typically by less than £20 per week.
Mendes noted, “The magnitude of cost increases in London is striking but not wholly unexpected.”
“Factors such as higher property values, limited housing supply, and strong demand—particularly from young professionals and international renters—contribute to this.”
“The return of students, hybrid work arrangements prompting proximity to the city, and landlords seeking to offset increased expenses further exacerbate the situation. Other regions are not experiencing this confluence of pressures.”
Rental Market Stability
Private and Social Rented Sectors
The proportion of households in the private rented sector has remained relatively stable at around 19 percent annually since 2017/18.
Similarly, the social rented sector has remained broadly consistent at approximately 17 percent of households since 2016/17.
Mendes added, “Concerns about a mass landlord exodus are not substantiated by the data. The proportion of households in private renting has shown remarkable stability.”
“This suggests landlords are either absorbing higher expenses or passing them on to tenants, potentially contributing to sustained rent inflation.”
Chris Sykes remarked that the private rental data is somewhat surprising given media reports of landlords selling properties.
However, considering the rapid rent increases in recent years, a supply-demand imbalance persists in the market, driving up prices.
Sykes speculated, “Increased shared living arrangements might play a role. For instance, two couples might now rent a property previously rented by a single couple.”