Lending for residential property purchases grew by 22% this yr to £176bn, with a notable spike in exercise prematurely of the stamp responsibility enhance in April, the most recent figures from UK Finance present.
Subsequent yr, nevertheless, they forecast progress of two% to £180bn as affordability pressures grow to be more difficult due mortgage funds remaining excessive in comparison with borrower earnings.
New buy-to-let (BTL) lending was up by 11% in 2025 to £11bn. Subsequent yr they forecast that to stay unchanged, with progress being impacted by extra taxes and regulation on this space.
General, the variety of property transactions happening is anticipated to barely decline, from 1.21 million in 2025 to 1.20 million in 2026 and 2027.
| 2026 forecast | Yr-on-year change in comparison with 2025 | |
| Property transactions | 1,202,000 | -1 per cent |
| Gross lending | £300 billion | 4 per cent |
| Lending for home buy | £180 billion | 2 per cent |
| New buy-to-let buy lending | £11 billion | 0 per cent |
| Remortgaging | £77 billion | 10 per cent |
| Product Transfers | £261 billion | 2 per cent |
| Arrears | 87,500 | -5 per cent |
| Possessions | 9,400 | 9 per cent |
Refinancing
The second half of this yr noticed sturdy progress in mortgage refinancing as extra prospects reached the tip of their mounted charge offers. Some 1.6 million mounted charge mortgages expired in 2025 and round 1.8 million are as a result of expire in 2026.
This meant exterior remortgaging grew by 17% to succeed in an estimated £71bn in 2025, whereas Inside Product Transfers (the place a borrower stays with their current lender) rose by 18% to £256bn).
UK Finance count on regular progress subsequent yr in each kinds of refinancing, with exterior remortgaging rising 10% to £77bn and Product Transfers by 2% to £261bn.
Arrears and possessions
Mortgage arrears ranges fell this yr to 92,100, down from 104,800 the earlier yr. UK Finance count on arrears to proceed to say no by 5% in 2026, to 87,500.
In the meantime, mortgage possessions rose this yr because the business and courts transfer again in direction of regular ranges of exercise following the pandemic. UK Finance estimate there have been 8,600 possessions in 2025 and count on a 9% enhance in 2026 to 9,400.
James Tatch, head of analytics at UK Finance, mentioned: “The mortgage market confirmed energy in 2025, notably for home purchases. However even with welcome tweaks to lending laws this yr, affordability is now very tight and that is more likely to restrict borrowing choices for potential patrons in 2026.
“There was anticipated progress in remortgage exercise this yr, and with extra households coming off their mounted charges subsequent yr, we count on to see additional progress in 2026.
“In the meantime, the variety of prospects in arrears continued to enhance as price and charge pressures eased, and we are actually transferring in direction of the historic lows seen in 2022. Though the variety of possessions rose, they continue to be very low by pre-pandemic comparisons. We do count on a small rise subsequent yr, however possessions will stay at low volumes.”
