THE PROPERTY FILTER TAKE
The numbers are pointing to a borrowing squeeze. Average five-year fixed rates have risen from below 4 per cent in January to around 4.8 per cent (This is Money, 27 August 2026).
Buyers now need £18,200 more deposit to hold the same monthly payment. A £200,000 mortgage becomes around £182,000, and the top-up runs from £10,200 in the North East to £35,500 in London.
Consider re-running your borrowing figures at a 4.8 per cent stress rate before your next offer, and speak to your broker about where five-year fixes sit this week.
Buyers need £18,200 more deposit than in January to keep their monthly mortgage payment unchanged (This is Money, 27 August 2026). The cause is mortgage rates. Average five-year fixed rates (where the interest rate is fixed for five years) have gone from below 4 per cent in January to around 4.8 per cent on that date.
How much less can buyers borrow now?
The borrowing maths has moved further than the headline rate suggests. A buyer who could have supported a £200,000 mortgage in January can now borrow only around £182,000 for the same monthly repayment (This is Money, 27 August 2026). That is roughly 9 per cent less borrowing power for the same monthly outlay.
This is Money attributes the rate rise to future inflation expectations shaped by the Iran war. It reports that this reversed hopes of a Bank of England rate cut. The rate you can get now, rather than the one you hoped for in spring, is what your lender underwrites against.
For anyone buying to let (BTL, buying a property to rent out), a rate near 4.8 per cent drives the stress test. That is the affordability check a lender runs at a rate higher than the one you actually pay. You may wish to re-run your figures with our free buy-to-let stress test calculator before your next offer.
Which regions face the biggest deposit gap?
The £18,200 national figure hides a wide regional spread. In London, typical buyers need to add £35,500 to their deposit, just under double the national average. In the North East, where house prices are lower, the top-up is £10,200 (This is Money, 27 August 2026). The gap between the two is £25,300.
Cash requirement scales with purchase price, so the same rate move hits high-value southern markets hardest in pounds. All the regional figures quoted here are English regions, and This is Money reports the search pick-up as Britain-wide. If you are weighing a shift from southern stock to northern stock, our property investment strategies hub sets out how those regional trade-offs compare.
What the price and demand data shows
Prices are already reflecting the squeeze, and the split runs north to south. Over the last year prices fell 1 per cent in London and 0.3 per cent in the South East. Over the same period they rose 3.1 per cent in the North West and 2.5 per cent in the North East. Yorkshire was up 1.7 per cent and the West Midlands 1.5 per cent (This is Money, 27 August 2026). Nationally, annual house price growth was 0.9 per cent in the year to July, down from 1.3 per cent in June.
Jeremy Leaf, a north London estate agent, told This is Money that higher mortgage costs "have reinforced the buyer's hand and are resulting in lower offers, particularly for flats". Softer offers and long-unsold flats are the conditions that tend to produce motivated sellers, and Property Filter's deal-sourcing software is built to surface that kind of stock.
Demand data cuts the other way. Sales are down 6 per cent year-on-year (compared with the same point 12 months earlier), yet online searches are up 7 per cent. There are also 5 per cent more homes on the market than a year ago, This is Money reported. The same report described buyers taking a "wait and see" approach over the summer months in response to higher borrowing costs and political uncertainty. More stock and fewer completed sales tilt the balance towards the buyer, and our negotiation and finance hub covers how to use that in an offer.
Key takeaways
Buyers need £18,200 more deposit than in January to hold their monthly payment steady (This is Money, 27 August 2026).
Average five-year fixed rates moved from below 4 per cent in January to around 4.8 per cent as at 27 August 2026.
The same monthly payment now supports around £182,000 of mortgage instead of £200,000, roughly 9 per cent less.
The deposit top-up ranges from £10,200 in the North East to £35,500 in London, a spread of £25,300.
Sales are down 6 per cent year-on-year while online searches are up 7 per cent, with stock 5 per cent higher than a year ago.
Frequently asked questions
Why do higher mortgage rates mean a bigger deposit?
How much has borrowing power actually fallen?
Why is London worse affected than the North East?
Are house prices falling everywhere?
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