The UK mortgage market has reached a point where affordability, not appetite, is setting the pace. A Rightmove analysis underlines that shift.
The strongest house price growth across the past year was not in prestige postcodes, but in the most affordable parts of the country. Lower-priced areas with good transport links and access to employment saw the biggest rises, while overall national asking prices ended the year 0.6% lower.
Affordability is not just a consideration for first-time buyers as rising living costs eat into household budgets. Inflation has been driven largely by non-negotiable spending such as food and utilities. At the same time, wage growth, while still positive, is slowing and real-terms gains remain modest once inflation is factored in.
These forces are shaping behaviour across the housing ladder. Buyers have required a higher degree of flexibility to achieve their goals and increase their buying power. In London and the South East, where prices are highest, this has led to subdued activity compared with other regions, while more affordable markets have seen both higher activity and price growth.
The way back
There are, however, signs that conditions are starting to ease. The Bank of England held Bank Base Rate (BBR) at 3.75% on 30th April 2026, following a series of reductions since August 2024 as inflation cooled. The lower Bank Rate has helped ease some affordability pressure, although mortgage pricing remains sensitive to swap rates, inflation and wider market uncertainty.
Although the outlook is looking less certain, that shift is particularly important for those coming to the end of fixed deals. According to IMLA, remortgaging is expected to regain momentum over the next two years if affordability improves. Remortgage volumes are forecast to rise from £93bn in 2025 to £103bn in 2026 and £110bn in 2027.
With around 1.8 million borrowers due to refinance in 2026 alone, more households may have genuine choice again, rather than defaulting to a product transfer.
How the industry is responding
Brokers will know better than most what is required to manage these pressures. They will have been reviewing and re-reviewing cases right up to completion to secure the best available rate for clients. Positively, product choice has also widened and as we entered 2026, borrowers had access to more than 7,100 mortgage products, the highest level since 2007, reflecting growing market competition.
Further regulatory clarity has helped too; when in March 2025, the Financial Conduct Authority (FCA) reminded lenders that its interest rate stress test rules already allow for flexibility appropriate to the customer and the mortgage. Then, the Bank of England confirmed several major lenders had adjusted their approach, with median stress rates on new lending falling by around 100 basis points between early 2025 and Q3.
So, higher loan-to-income (LTI) lending is rising, but from a controlled base with responsibility at its core. Lending at 4.5 times income or above accounted for around 9.5% of new lending in Q3 2025, comfortably below the regulatory cap. As rates ease, this headroom should create space for lenders to further support borrowers who are otherwise creditworthy but constrained by traditional multiples.
A more flexible approach to affordability
This is where a more holistic view of affordability becomes critical. Many clients today sit just outside standard criteria, not because they are overstretched, but because their income or spending does not fit a more narrow template. Lenders that can assess the full picture, income, assets, liabilities and future trajectory, are better placed to support responsible, sustainable borrowing.
The enhancements we have made to our core and Bespoke ranges offer borrowers greater criteria flexibility to fit a variety of borrowers. We lend up to 5x income on core mortgages, have extended our maximum loan term to up to 40 years and offer new-build lending at up to 90% loan-to-value (LTV), with 85% on flats. Interest-only is also now offered at up to 60% LTV.
Our Bespoke route via our BDMs offers up to six times income, alongside increased maximum loan sizes and greater flexibility to offset certain regular payments where appropriate. This allows affordability to be demonstrated in a more measured way, often without needing to rely on the maximum income multiple available.
Crucially, we support this with manual underwriting and experienced relationship management, giving brokers the chance to discuss the case upfront and ensure the right framework is applied from the outset. The aim is not to stretch affordability for its own sake, but to bridge a gap where the client’s position supports it.
As the market moves through 2026, affordability will remain the defining issue. While the outlook for mortgage pricing remains uneven, many borrowers coming to the end of fixed deals may still find they have more options than they did during the most restrictive phase of the cycle. Brokers have more tools at their disposal. Those who understand how to present the full story, and where flexibility genuinely exists, will be well-equipped to help clients.
Rhys Powell is national sales manager at Bank of Ireland for Intermediaries