Mortgages in 2025 are set for a boom!
The UK mortgage market is set to enjoy a resurgence in 2025, that’s according to forecasts from UK Finance, as mortgage lending is predicted to rise by an impressive 11% to reach £260 billion next year! This growth in mortgages in 2025 is expected to be driven by a sharp increase in remortgaging activity, alongside a steady rise in lending for property purchases, signalling improving conditions for homeowners and buyers moving into the new year.
A Stronger Market For Mortgages In 2025
In a recent article released this month, UK Finance’s outlook for 2025 suggests the mortgage market is already on the path to recovery, with gross lending for 2024 estimated at £235bn—up 4% from the previous year, despite the seemingly slow year in the mortgage industry as a whole. Within that figure, lending for home purchases has climbed by 11% to £135bn, reflecting sustained interest in home ownership despite economic challenges.
However, the most exciting development lies in the expected boom in remortgaging. After a 10% dip this year to £59 billion, UK Finance predicts remortgage activity will skyrocket by 30% in 2025, reaching £76 billion. This surge highlights an opportunity for current homeowners to absolutely take advantage of potential stability in interest rates in 2025 by speaking to a mortgage advisor as soon as possible. Lending for property purchases is also forecast to increase by 10% in 2025, hitting £76 billion. Combined with a projected 13% rise in internal product transfers to £254 billion, these figures underline the resilience of the UK property market and the growing financial confidence of households.
Buy-to-Let Market And Mortgage Arrears
The buy-to-let sector has also seen notable movement, with lending for new purchases rising by 10% this year to £10 billion. Although a slight contraction of 7% to £9 billion is expected in 2024, this remains a robust figure that reflects steady interest from property investors.
Additionally, mortgage arrears have dropped by 3% this year to 104,200, showcasing improved financial stability among homeowners. While arrears are projected to increase by 5% next year, the total number will likely fall to 99,000 as the overall mortgage market expands in 2025, demonstrating the strength of the broader economic recovery.
Opportunities For Homeowners And Buyers
This optimistic forecast from UK Finance certainly offers plenty of promise for those looking to secure a home or refinance existing mortgages. With remortgaging set to soar, borrowers may find better deals and greater flexibility in 2025 as lenders compete for their business. Similarly, the continued rise in lending for home purchases suggests a favourable environment for first-time buyers and movers alike.
Louis Mason, a mortgage expert at Oportfolio Mortgages, shares this positive outlook:
“The predictions from UK Finance show the resilience and adaptability of the UK mortgage market. A combination of stable interest rates, improved economic confidence, and the expected rise in remortgaging activity will create opportunities for homeowners to secure better deals and for buyers to take their first steps onto the property ladder. I expect 2025 to be a standout year, with strong momentum in both the property and financial markets.”
Speak To A Mortgage Expert In 2025
With growth on the horizon, 2025 is shaping up to be a pivotal year for the UK mortgage market, offering renewed hope and opportunities for individuals and families looking to achieve their property goals. If you or anyone you know is looking for a new mortgage in 2025, then please feel free to give our team a call. We are here to help.
