Mortgage affordability has deteriorated sharply since 2019, with the cost of borrowing rising nearly three times faster than house prices, according to the latest House Price Index from e.surv.
The average house price across Great Britain has increased by around 24% since June 2019, now standing at £328,800. The indicative monthly cost of buying the average home has climbed by approximately 78% over the same period, far outstripping property price growth.
Buyer demand has remained relatively resilient despite the affordability squeeze. Mortgage approvals have recovered considerably since the interest rate shocks of 2022 and 2023, although they have not yet returned to pre-pandemic levels. On a three-month average basis, mortgage approvals in May 2026 were around 6% lower than in June 2019.
The data points to a market that remains active but increasingly selective, with buyers more conscious of affordability and less willing to stretch beyond their budgets.
Affordability pressures shape buyer behaviour
Rob Owens, head of research at e.surv, said the gap between house price growth and buying costs helps explain much of the market's recent behaviour. "The gap between house price growth and buying costs helps explain much of the market's recent behaviour," said Owens.
"The impact is being felt through affordability rather than activity, with buyers increasingly constrained by borrowing costs and therefore more selective on price. Properties that are closely aligned to local budgets continue to attract interest, while those that stretch affordability are more likely to see longer selling times or price adjustments."
He added that the picture may improve in the coming months. "Looking ahead to the second half of 2026, house price growth is likely to remain modest, and mortgage rates have started to edge lower, which should help buyer confidence," he continued.
"Affordability pressures remain, but a more stable rate environment would give buyers and sellers greater confidence."
The findings suggest that while transaction activity has held up, mortgage affordability constraints are now the dominant factor shaping pricing and negotiation across the market. Sellers of properties priced close to local budgets are seeing stronger interest, while those pushing affordability limits face longer selling times or the need for price adjustments.
