Rhys Edwards on the affordability pressures shaping mortgage decisions on both sides of the divide
New data showing a 16% rise in £500,000-plus mortgages in the north of England tells one part of the story. The pressures quietly shaping mortgage buyer behaviour on both sides of the north-south divide tell another.
Figures from estate agency Savills, reported by The Times, show that the number of buyers borrowing at least £500,000 rose 16% in the north of England between 2021 and 2026, while in London and the south-east the figure fell 2% over the same period. That divergence has been driven by a combination of regional house price growth, loosened affordability criteria and a post-pandemic shift in where high earners are willing to live.
But Rhys Edwards (pictured top), head of mortgages at Stratton Wealth Management in Manchester, says the headline numbers only go so far. He points to a set of dynamics that sit beneath the data – from stamp duty acting as a soft ceiling on borrowing ambition, to the role of parental support and the friction caused by overpricing in certain markets.
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Why are buyers capping their own borrowing?
One of the more telling patterns Edwards observes is buyers actively limiting what they are willing to borrow, not because a lender has told them they cannot have more, but because they are unwilling to cross stamp duty thresholds.
"There are many first-time buyers trying to stay within the limits of the first-time buyer allowance and will actively avoid properties above that ceiling level because they find it too expensive," he told Mortgage Introducer. “They're stretching themselves as it is."
It is a distinction Edwards is keen to draw. Affordability, in his view, is never simply a question of what a lender will approve.
"There are two elements to affordability," he said. "There is what the lender says somebody can borrow, but there is also lifestyle and all those other choices to be taken into account. We need to think about what they like to do. It's not just about putting a roof above your head."
The regional dimension to stamp duty costs in 2026 is stark. Fewer than one in 10 first-time buyers in northern England paid stamp duty land tax in the first half of 2026, compared with almost eight in 10 in London, where the average bill stood at £8,750, according to analysis from Zoopla. That gap shapes broker conversations very differently depending on where a client is buying.
The Bank of Mum and Dad: bigger in the south, not more common
Parental financial support – commonly known in the UK mortgage market as the Bank of Mum and Dad, covering gifted deposits, guarantor arrangements and joint borrower structures – is a thread that runs through many of Edwards's first-time buyer conversations. He draws a clear distinction, however, between how it operates in different parts of the country.
"There can be significant contributions from the Bank of Mum and Dad more down south, whereas up north you tend to see smaller deposits," he said. "I would say the size of help is bigger in the south, not the number of clients being helped, which I would say is fairly even."
In London particularly, Edwards sees parents acting not just as gift givers but as joint borrowers or guarantors – a more structural form of involvement driven by the scale of the affordability gap. Groups of friends purchasing together is another route he encounters with increasing frequency among London clients seeking to bridge the gap between what they can borrow alone and what the market demands.
Overpricing: a persistent source of friction
Away from stamp duty and parental contributions, Edwards points to overpricing as a constant source of friction in 2026 – one that manifests differently in London than it does in the north.
In London, he sees overpricing as a significant issue currently holding parts of the market back. The practical consequence for brokers is down valuations – surveyors declining to support a purchase price the market will not bear.
"The only indication we have of things tightening up is where we start to see down valuations on property values," he said. "If a property is a suitable security – worth what someone is buying it for – we're not really seeing any significant challenges in the marketplace."
In the north, the picture is more localised. Catchment areas for well-regarded schools create sharp price differentials within short distances, and Edwards sees similar overvaluation risks among homeowners who have invested heavily in renovation.
"People will buy a property, renovate it to the absolute max, and then feel it's worth significantly more than every other house on the road, which unfortunately doesn't always translate," he said. "It's certainly more desirable because it's less work, but it needs actual bricks and mortar value."
Downsizing and the equity advantage
One area where London mortgage borrowers retain a structural advantage is downsizing. Those with substantial equity built up over years of price growth in the capital are able to move – often out of London entirely – without taking on significant mortgage debt. Edwards sees this play out among older clients looking to reduce their borrowing ahead of retirement, as well as those moving to more suburban settings as family circumstances change.
The dynamic is less about borrowing more and instead about deploying accumulated wealth differently – trading a smaller London property for something larger elsewhere, with a materially reduced loan to service.
The bigger picture
Taken together, Edwards's observations sketch a market in which the headline shift towards larger northern mortgages is real but unevenly experienced. Hybrid working and rising regional house prices are genuine drivers. So too, however, are the structural pressures – stamp duty costs, parental support requirements, overpricing friction – that continue to shape what mortgage borrowers can and will do, wherever they are buying.
"The flexibility of hybrid working and companies not being so centralised has benefited the north-west with more demand," he said. "Ultimately, in certain areas it has pushed up property values, because there are more people willing to pay that level of money for those types of properties."
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