The number of mortgages for house purchase grew by 16.3% in 2025 to reach 720,000 loans, the highest number since the pandemic, figures from UK Finance have indicated.
The banking trade body said that activity in Q1 last year was boosted by borrowers looking to beat the changes to stamp duty in April, while the remainder of the year saw lending return to just above standard levels.
In its Household Finance Review Q4 2025, UK Finance said the mortgage market had seen innovation throughout 2025 with new products enabling more first-time buyers to get on the property ladder. An estimated 391,000 first-time buyer loans were granted last year, up from 332,000 in 2024.
Refinancing activity also strengthened in the second half of the year. A total 511,000 loans were advanced in Q4, a level up 25% on the same quarter in 2024, with internal product transfers remaining the most popular choice for those looking to refinance.
The number of mortgages in arrears also continued to fall in Q4 to 90,050, the seventh consecutive quarter of contraction, while there was a dip in possessions in Q4 due to the industry’s voluntary pause on possessions over the holiday period.
Managing director of personal finance at UK Finance, Eric Leenders, said: “The mortgage market saw strong growth in 2025, with lending reaching its highest level since the pandemic and first time buyer numbers supported by innovative products to widen access.
“Affordability remains tight despite regulatory easing, but the continued fall in arrears is reassuring, and gradually easing rates should help support borrowers in the year ahead.”
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