South west London has been revealed as the area with the highest levels of mortgage debt in the capital, according to a new study analysing household borrowing.

The research, carried out by bridging loan experts Bridging Finance London, used UK Finance data from Q4 2021 to calculate the average mortgage debt per household across local authorities.

The figures highlight the financial pressures facing homeowners in high-value areas as interest rates and living costs continue to rise.

Taking the top spot, South west London – which includes boroughs such as Richmond upon Thames, Wandsworth, and Merton – reported an average mortgage debt per household of £109,134.39.

This figure was based on a total mortgage value of over £41.6 billion spread across more than 380,000 households.

Close behind was Kingston upon Thames, with mortgage debt per household averaging £95,614.50. The borough had a total outstanding loan value of £22.7 billion across around 238,000 homes.

Top five areas in London by mortgage debt

• South west London – £109,134.39
• Kingston upon Thames – £95,614.50
• East Central London – £91,374.77
• Bromley – £82,813.18
• Watford – £78,409.59

The findings suggest that higher property prices in areas like Richmond and Kingston are directly contributing to increased mortgage debt levels.

Managing Director at Bridging Finance London, Matthew Archer, said rising property values and increasing interest rates are key drivers behind the trend.

"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," he explained.

Archer added: "Since London and the surrounding areas are home to many young working professionals, they are less likely to have paid off a significant portion of their mortgage. By contrast, areas with older populations, like in Wales, tend to see lower levels of mortgage debt."

The managing director urged homeowners and buyers to ensure they are getting the best mortgage deals possible.

He continued: "If you're a prospective buyer, it starts with purchasing a home that suits your financial situation.

"For current homeowners, fixed-rate mortgages are ideal for budgeting, and if you're unsure about your deal, speaking to a mortgage advisor could help you find a better option."