Study Reveals London Boroughs Where Mortgages Could Take a Lifetime to Repay

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A new study has identified 25 regions across London, the Southeast, and the East of England where the average homeowner could be unable to repay their mortgage within their lifetime.

The analysis by mortgage specialists at Bower Home Finance used Office for National Statistics data on median house prices and annual earnings across England, Scotland, and Wales. It calculated how long two full time median earners would need to repay a mortgage on a median priced property if they spent 30% of their net monthly pay on repayments. The findings are consistent with a recent report on the analysis, which also identified Inverclyde as having the UK’s shortest estimated repayment time at 6.9 years.

To determine whether a mortgage could be repaid within a homeowner’s lifetime, the study used an average first time buyer age of 34 and a UK life expectancy of around 81 years.

London has the longest repayment times

All 25 regions identified as having lifetime mortgage repayment periods are in London, the Southeast, or the East of England. 17 are London boroughs, meaning homeowners in more than half of the capital’s boroughs could be unable to clear their mortgages within their lifetimes.

The affected London areas include Kensington and Chelsea, Westminster, Camden, Hammersmith and Fulham, Richmond upon Thames, Ealing, Barnet, Wandsworth, Hounslow, Kingston upon Thames, and others.

London has the UK’s longest median mortgage repayment time, at more than 39 years. Only five London regions have repayment times below 40 years, while 10 have periods exceeding 40 years. Overall, 17 London regions have repayment times that extend beyond the average property buyer’s lifetime.

The Southeast has a median repayment duration of nearly 30 years, while the East of England records 26.5 years.

The 25 regions where the average homeowner could be unable to clear their mortgage within their lifetime are:

Geoff Charles, CEO of Bower Home Finance, commented on the findings: “It’s really staggering to see that house prices in London, the Southeast, and the East of England are so high that the average homeowner cannot afford to pay off the mortgage in their lifetime.”

“The study highlights that properties in London sell for a whopping median price of £538,255, which means that homeowners are faced with incredibly long mortgage repayment durations.”

“Similarly, homes in the Southeast sell for a median price of £382,250, while the East of England has a median property price of £345,000.”

“What really stands out in the study is how much cheaper properties are in Scotland, with a median property price of £183,000.”

“Scotland dominates the ranking of the 10 regions with the quickest mortgage repayment durations, highlighting just how much quicker property owners there can expect to pay off their mortgages.”

“For homeowners in the UK who are struggling with long mortgage repayment durations, overpayments can be a quick way to clear your mortgage in certain cases.”

“A mortgage overpayment calculator can help you establish how much to overpay to shorten your mortgage repayment duration.”

“Before making any overpayments, check that your specific lender allows you to do so penalty free and whether there are any particular overpayment limits in place. This is typically up to 10% of your outstanding mortgage balance per year.”

“Most mortgage deals in the UK typically last between two and five years. After this, you will automatically be switched to your lender’s Standard Variable Rate (SVR), which can be considerably more expensive due to interest rates.”

“Because of this, it’s important that you either choose a new deal with your current provider or switch to a new provider entirely.”

“In certain cases, changing mortgage providers can make overpayments more flexible, helping to reduce your mortgage repayment time.”

Scotland records the shortest repayment times

Inverclyde has the shortest estimated mortgage repayment time in the UK, at 6.9 years. Properties there have a median price of £123,000, while workers earn a median salary of £36,650. The median property price is more than 60% below the UK’s median house price of £310,919.

East Ayrshire ranks second, at seven years, followed by Aberdeen City at 7.2 years. North Ayrshire and West Dunbartonshire both record estimated repayment times of 7.4 years.

Hyndburn and North Lanarkshire share fifth place, at 8.1 years. Hyndburn has a median property price of £135,000 and a median salary of £34,987, while North Lanarkshire has a median property price of £155,000 and a median salary of £41,070.

Burnley follows at 8.2 years, with Merthyr Tydfil at 8.4 years, Blaenau Gwent at 8.5 years, and Dundee City at 8.7 years. Blackpool and South Ayrshire both record estimated repayment times of nine years. Scotland accounts for eight of the areas in the top 10, although the ranking includes ties.

Scotland has the shortest overall median mortgage repayment duration, at 10.5 years. Inverclyde has the shortest period in the country, while East Lothian has the longest in Scotland, at around 19.8 years.

The Northeast has the second shortest overall repayment time, at nearly 11 years. County Durham records the quickest time in the region, at 9.1 years, while Newcastle has the longest, at 14.2 years.

Yorkshire and the Humber has the third shortest repayment period, at nearly 13 years. Hull records the lowest figure, at 9.5 years, while York has the highest, at more than 21 years.

The Northwest has a median repayment duration of nearly 13.8 years, while Wales records a median of 14 years.

The study was conducted using analysis provided by mortgage specialists at Bower Home Finance.