Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.

ONS: Mortgage Interest Payments Drive Higher Inflation for UK Households

Mortgage interest payments were a significant cause of higher inflation for non-retired households in the year to June 2026, according to Office for National Statistics (ONS) data. Private renters experienced the highest annual inflation rate among all tenure types during this period.

ONS figures showed that UK household costs rose by 2.8% year-on-year in June 2026. Mortgage interest payments were identified as a leading contributor to these rising costs, particularly affecting non-retired households. The data indicated that mortgage interest payments contributed 0.14 percentage points more to inflation for non-retired households compared to retired households, a slight decrease from the 0.15 percentage point gap reported in March 2026.

Private renters faced the highest annual inflation rate at 3% in June 2026. Mortgagor and other owner-occupier households followed, with a 2.8% inflation rate over the same period. Outright owner-occupier households experienced the lowest annual inflation rate among all tenure types, at 2.6% in the year to June 2026.

The report also noted that cost-of-living pressures were among the factors contributing to an annual decline in residential property transactions in July. The decision to hold the base rate was welcomed as a measure to help buffer household budgets against further financial pressure.

These findings are relevant for UK letting agents and inventory clerks monitoring market trends, as inflation and cost-of-living changes can impact tenant affordability and property transaction volumes.