Mortgage rates surged at an unprecedented pace in 2022, with the average 10-year fixed rate doubling between March and December of that year. In response to mounting inflation, the Bank of England implemented a series of rate hikes, pushing borrowing costs steadily higher. By October 2025, the average 10-year fixed mortgage rate stood at **** percent. As financing becomes more expensive, housing demand has cooled, weighing on market sentiment and slowing house price growth. How have the mortgage hikes affected the market? After surging in 2021, the number of residential properties sold fell significantly in 2023, dipping to just above *** million transactions. This contraction in activity also dampened mortgage lending. Between the first quarter of 2023 and the first quarter of 2024, the value of new mortgage loans declined year-on-year for five consecutive quarters. Even as rates eased modestly in 2024 and housing activity picked up slightly, volumes remained well below the highs recorded in 2021. How are higher mortgages impacting homebuyers? For homeowners, the impact is being felt most acutely as fixed-rate deals expire. Mortgage terms in the UK typically range from two to ten years, and many borrowers who locked in historically low rates are now facing significantly higher repayments when refinancing. By the end of 2026, an estimated five million homeowners will see their mortgage deals expire. Roughly two million of these loans are projected to experience a monthly payment increase of up to *** British pounds by 2026, putting additional pressure on household budgets and constraining affordability across the market.

India Foreign Banks: Term Loan Rate: At Least 60% Business: Low: The Royal Bank of Scotland data was reported at 6.700 % pa in Jun 2018. This records an increase from the previous number of 2.000 % pa for Sep 2017. India Foreign Banks: Term Loan Rate: At Least 60% Business: Low: The Royal Bank of Scotland data is updated quarterly, averaging 2.000 % pa from Sep 2010 (Median) to Jun 2018, with 30 observations. The data reached an all-time high of 10.000 % pa in Sep 2013 and a record low of 2.000 % pa in Sep 2017. India Foreign Banks: Term Loan Rate: At Least 60% Business: Low: The Royal Bank of Scotland data remains active status in CEIC and is reported by Reserve Bank of India. The data is categorized under India Premium Database’s Interest and Foreign Exchange Rates – Table IN.MB042: Lending Rate: Other than Export Credit: Term Loan Rate: At Least 60% Business: Low.

India Foreign Banks: Term Loan Rate: High: The Royal Bank of Scotland data was reported at 10.500 % pa in Jun 2018. This records an increase from the previous number of 2.000 % pa for Sep 2017. India Foreign Banks: Term Loan Rate: High: The Royal Bank of Scotland data is updated quarterly, averaging 22.000 % pa from Sep 2010 (Median) to Jun 2018, with 30 observations. The data reached an all-time high of 36.000 % pa in Dec 2012 and a record low of 2.000 % pa in Sep 2017. India Foreign Banks: Term Loan Rate: High: The Royal Bank of Scotland data remains active status in CEIC and is reported by Reserve Bank of India. The data is categorized under India Premium Database’s Interest and Foreign Exchange Rates – Table IN.MB041: Lending Rate: Other than Export Credit: Term Loan Rate: High.

During the COVID-19 pandemic, the number of house sales in the UK spiked, followed by a period of decline. In 2023 and 2024, the housing market slowed notably, and in January 2025, transaction volumes fell to 46,774. House sales volumes are impacted by a number of factors, including mortgage rates, house prices, supply, demand, as well as the overall health of the market. The economic uncertainty and rising unemployment rates has also affected the homebuyer sentiment of Brits. How have UK house prices developed over the past 10 years? House prices in the UK have increased year-on-year since 2015, except for a brief period of decline in the second half of 2023 and the beginning of 2024. That is based on the 12-month percentage change of the UK house price index. At the peak of the housing boom in 2022, prices soared by nearly 14 percent. The decline that followed was mild, at under three percent. The cooling in the market was more pronounced in England and Wales, where the average house price declined in 2023. Conversely, growth in Scotland and Northern Ireland continued. What is the impact of mortgage rates on house sales? For a long period, mortgage rates were at record-low, allowing prospective homebuyers to take out a 10-year loan at a mortgage rate of less than three percent. In the last quarter of 2021, this period came to an end as the Bank of England rose the bank lending rate to contain the spike in inflation. Naturally, the higher borrowing costs affected consumer sentiment, urging many homebuyers to place their plans on hold and leading to a decline in sales.

Foreign Banks: Term Loan Rate: At Least 60% Business: High: The Royal Bank of Scotland在2018-06达9.400 % 每年，相较于2017-09的2.000 % 每年有所增长。Foreign Banks: Term Loan Rate: At Least 60% Business: High: The Royal Bank of Scotland数据按季度更新，2010-09至2018-06期间平均值为13.010 % 每年，共30份观测结果。该数据的历史最高值出现于2012-12，达19.000 % 每年，而历史最低值则出现于2017-09，为2.000 % 每年。CEIC提供的Foreign Banks: Term Loan Rate: At Least 60% Business: High: The Royal Bank of Scotland数据处于定期更新的状态，数据来源于Reserve Bank of India，数据归类于India Premium Database的Interest and Foreign Exchange Rates – Table IN.MB043: Lending Rate: Other than Export Credit: Term Loan Rate: At Least 60% Business: High。