UK Mortgage Lending 2025: Volumes, Key Data and 2026 Outlook

Mortgages Director's Cut

The residential market had a number of disruptions last year, with the biggest being the budget. That uncertainty delayed decision-making and put a lot of movement on hold.

Having said that, the mortgage market did find its feet again as the year progressed. By the end of 2025, it was operating in a far more normal rhythm - and with the base rate reducing to 3.75%, the conditions are in place for 2026 to get off to a strong start.

Below are the key data points that best summarise where the mortgage market actually landed in 2025.

2025 Mortgage Lending Snapshot

Residential Purchase Transactions in 2025

Official HMRC monthly residential transactions data is published with a one to two-month lag and is not yet finalised for the full calendar year. However, provisional estimates and pattern tracking give us a solid range.

Seasonally adjusted monthly figures through much of 2025 sat between 90,000 and 100,000 residential sales per month. For example, October’s estimate came in at 98,450 transactions.

Based on HMRC data and aggregated market indicators, annual residential purchase transactions in 2025 are broadly estimated at:

~1.15 million to 1.20 million completed transactions

These figures remain provisional until final HMRC totals are published.

Value of Residential Property Transactions

The average UK house price in late 2025 was approximately £270,000, based on provisional HM Land Registry and ONS data.

Multiplying that by the estimated transaction volumes gives an approximate total value of residential property transacted in 2025 of:

£310 billion – £325 billion+

This places 2025 firmly back into a functioning market, rather than the stalled conditions many headlines suggested earlier in the year.

Gross Mortgage Lending Volume in 2025

Quarterly mortgage data shows strong but uneven lending flows throughout the year.

• Q1 2025: ~£77.6bn
  
• Q2 2025: ~£58.8bn
  
• Q3 2025: ~£80.4bn — the strongest quarter in several years
  

If you annualise those flows and assume a Q4 broadly in line with Q3 (adjusted for seasonality), total gross mortgage lending across UK lenders in 2025 likely sits at:

£280 billion – £300 billion+

This represents a meaningful recovery in lending activity, particularly considering the disruption earlier in the year.

Final Thoughts

2025 was a disrupted year for the mortgage market — but not a broken one.

Once the noise settled, transaction volumes held up, lending activity recovered, and the market returned to a more predictable working pattern. With base rates now lower and confidence gradually improving, the foundations are in place for a more active 2026.

As always, the best outcomes will be achieved by borrowers who are well-prepared, well-advised and realistic about structure and affordability in a changing rate environment.

If you’d like to discuss what this data means for your own plans in 2026 - whether that’s purchasing, refinancing or restructuring - I’m always happy to have a conversation.

DEAL OF THE YEAR: £1.8M REMORTGAGE SAVES £10K PER MONTH

The high-end property market has been sticky over the last few years. At P10, we specialise in advising on high-value transactions, and in this instance we were supporting a client through a luxury development in Buckinghamshire.

The project consisted of three properties, each valued at over £3m.

Like much of the wider market, once the development completed, sales were taking significantly longer than expected. That delay created two serious problems:

First, the compound interest on the development facility was steadily eroding the client’s equity.

Second, in an attempt to stimulate demand, the asking prices were being reduced.

Every reduction meant less money in our client’s pocket. And the development debt was costing £15,000 per month.

At that point, continuing to chase a sale was becoming expensive.

So we reframed the strategy.

Rather than forcing a disposal in a slow market, we proposed the client retain one of the properties on a medium to long-term basis.

By doing this, they could:

• Stop discounting the asset
  
• Generate rental income
  
• Pay down the expensive development debt
  
• Wait for the high-end sales market to recover
  
  

With a tenant secured, we arranged a long-term remortgage solution.

However, this introduced a structural challenge.

The property was owned within the development company, which made conventional buy-to-let lending difficult. Most lenders would not support the required structure.

At this point, we brought in our in-house tax advisory team.

We restructured the client’s business interests into a new group structure, allowing the asset to be moved into a dedicated SPV without triggering stamp duty or other tax liabilities. Stamp duty alone on that transfer would have been approximately £340,000.

The final hurdle was rate sensitivity.

Due to the relatively low yield on a high-value property, the mortgage rate needed to be under 4% to make the numbers work. Anything higher would have required capital repayment the client simply didn’t have available at the time.

With access to over 300 lenders and a deep understanding of lender appetite, we secured:

Mortgage amount: £1.8m
LTV: 70%
Product: 2-year fixed at 3.62%
Structure: Asset moved into new SPV within group structure

The Outcome

• Over £10,000 per month saved in interest costs
  
• Rental income generating healthy surplus
  
• £19,000 positive swing in income vs outgoings
  
• £340,000 stamp duty avoided
  
• No forced sale at the bottom of the market
  
• No early repayment charges restricting future exit
  

By not being forced to sell, the client expects the asset to deliver at least an additional £500,000 in value over the next few years.

Across a three-year period, the difference in projected net worth impact is approximately £900,000.

This wasn’t simply about securing a mortgage.

It was about restructuring ownership, managing lender appetite, understanding tax implications, and protecting long-term equity.

In slower markets, judgement matters more than speed.

That’s where having the right advisers in your corner makes the difference.