South West London has the highest average mortgage debt per household in the capital, according to new analysis by bridgingfinancelondon.com. Using UK Finance data from Q4 2021, the research examined total outstanding residential loans across UK local authorities, calculating a per-household average to identify areas most affected by mortgage debt.
The study found that households in South West London owe an average of £109,134.39 in mortgage debt, based on a total outstanding loan value of £41.68bn across 381,917 households. Kingston upon Thames ranked second, with average mortgage debt of £95,614.50 per household, while East Central London followed in third at £91,374.77.
Bromley and Watford completed the top five, with approximate debts per household of £82,813.18 and £78,409.59 respectively.
Matthew Archer, managing director of bridgingfinancelondon.com, said: “Areas with higher house prices typically have higher levels of mortgage debt, because the amount you take out for your mortgage loan is directly tied to the cost of the house that you’re buying. Additionally, some areas may be more likely to have fixed mortgage rate deals, which ensure a consistent repayment rate, as opposed to variable rate deals that increase in interest, adding to the amount of debt a homeowner owes.
“Another factor to consider is the average age of the local population, as older homeowners will have likely paid off more of their mortgage loan. Since London and the surrounding areas are home to many young working professionals, they will be less likely to have paid off a significant chunk of their mortgage. On the other hand, according to 2023 ONS figures, Wales had the oldest population in the UK, which could explain why no Welsh areas appear in the top 50 national ranking.
“If you’re a prospective homeowner, it’s important to remember that a lower mortgage debt starts with buying a property that is more affordable and suits your financial situation. Additionally, all homeowners should ensure that they are on the best rate possible. Fixed-rate mortgages that last for as long as possible are ideal, as you pay a set rate for a determined period of time without changes in interest.
“While mortgage repayments can be daunting and significantly impact your finances, there are ways that you can make them more manageable. If you are unsure about your current mortgage rate or are struggling with the cost, speak to a mortgage broker or advisor, as they will search the market and potentially be able to find you better deals.”
