The total housing cost bill for mortgaged owner occupiers in the UK reached £114.4bn in 2025, new research from Savills has revealed.

This means that across the 8.8 million mortgaged owner occupiers, the average mortgaged homeowner is now paying £13,000 a year.

Savills said an increase in costs had primarily been driven by a sharp increase in mortgage interest payments, which have increased by 9% over the past year from £49.2bn to £53.7bn in 2025.

The property firm noted that while mortgage interest alone has doubled over the past five years, regular capital repayments have risen at a more modest rate in the last year alone, totalling £60.7bn in 2025.

“In a market where homeowners are fixing their mortgages for longer, the impact of higher interest rates on housing costs – and on households’ ability to spend elsewhere in the economy – tends to have a much longer tail,” head of residential research at Savills, Lucian Cook, commented.

“Until recently, 2026 looked set to offer some respite, but that is now less certain given the prospect of another wave of inflation, which mortgage markets are typically quick to price in.”

Savills’ research, which analysed private and social rents as well as owner occupier mortgages, revealed that total UK housing costs hit a record high £226bn in 2025. Housing costs have grown by £7.9bn over the past year (3.6%), and by £66bn over the past five years, the equivalent of a 41% rise.

In the rental market, total costs for renters reached £112bn in 2025, of which £81.1bn was paid to private sector landlords.

This means that the annual bill for the average household renting in the private sector has reached £15,000, reflecting a 27% increase in the total amount paid by private renters over the past five years.

“The pace of growth in the nation’s housing costs has slowed substantially compared with 2023 and 2024” Cook added.

“In 2025, the burden of higher mortgage costs has been felt mainly by households coming off longer term fixed rate deals. At the same time, we’ve seen a return to much more normal levels of rental growth.”

---