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Comparing UK Mortgages With The Rest Of The World

In the media we are constantly bombarded with news about the dire situation our housing market is in here in the UK, but how bad is it really? Here at Search Mortgage Solutions we have been casting our expert eye across the globe to see how bad housing markets are in different countries to get a better idea of the state of our market.


If you currently rent then this might not be an easy read as figures show that the UK renting costs are currently the highest in Europe. According to figures from the National Housing Federation (NHF), UK tenants on average spend 39.1% of their income on rent compared to the European average of 28%. The biggest contrast came in figures from Holland and Germany which showed that private rents were 50% cheaper on average than here in the UK.

The figures also suggested that renting in the UK is generally less secure than in other countries across Europe. They put this down to renting contracts being shorter in the UK on average in comparison the average European contract which is longer.


In comparison the mortgage market makes for fantastic reading. The British Bankers Association put this down to “fierce competition” between lenders in this country, which just isn’t replicated in any other European country.

Competition is at an unprecedented level in the UK at the moment to the point where even those already on a very low mortgage rate are being offered better deals. While this is obviously good news for those with a foot on the property, it is argued that the rental market is now making it even harder for first time buyers to get on the ladder.

Having a competitive mortgage market is great, but our rental market means that it is increasingly difficult for those looking to buy for the first time to save for their first deposit. The NHF chief executive David Orr has put this down to poor investment in the housing market in previous years meaning there just isn’t enough houses, forcing existing rental prices up due to competition for contracts.

The US housing market also makes for interesting reading when considering house prices. Recent figures show the average US house will set you back £124,723, whilst the average house price here is £186,553. These figures clearly reinforce what David Orr said about the market being too saturated because of a lack of houses available, therefore prices and rent costs are being pushed up.

As expected though the mortgage market is a very complex beast, and becomes even more so when comparing from abroad. While the average house price is considerably cheaper in the US, the average interest rate is much higher. The average UK rate stat at around 2% while in the US it stands at a whopping 4%.

Clearly this shows that nothing is black or white in the world of mortgages and different countries have different financial and economical problems effecting their housing market just as much as we have just in a variety of different ways.


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