The total cost of housing in the UK has reached a staggering £226 billion, with both renters and owners facing a 41% increase over five years. Last year alone, the bill rose by £8 billion, driven primarily by an 11-year high in the cost of borrowing. This significant financial shift is changing the way millions of people manage their monthly finances.
Mortgage holders are bearing a huge portion of this burden, with total annual payments reaching £114 billion. The average borrower now pays roughly £13,000 per year, a figure that has risen sharply as cheap fixed-rate deals expire. Interest payments now account for more than half of the total increase in national housing spend.
The rental market has also seen significant growth, with costs totaling £112 billion in 2025. Private sector landlords received £81 billion of this total, with the average private renter now paying £15,000 annually. Over the last five years, the bill for those in the private rental sector has jumped by 27%.
Economic experts warn that the transition to higher interest rates has a “long tail” that will affect consumer spending for years. The hope for lower rates in 2026 is currently being tempered by global economic turmoil and the risk of new inflationary pressures. Recently, average two-year fixed-rate mortgages have once again climbed above the 5% mark.
Despite these headwinds, the spring property market is described as “steady” and active. Rightmove reports that asking prices have increased by a typical seasonal average of £3,023 this month. With a high volume of properties currently available, the market is finding a new equilibrium despite the higher cost of entry.