A lot of my friends bought houses with mortgage in UK, and they said it is Halal. Is that correct?

All perfect praise be to Allah, The Lord of the Worlds. I testify that there is none worthy of worship except Allah, and that Muhammad is His slave and Messenger.

It is forbidden to purchase a house through a loan that involves Riba (interest and/or usury) as long as one can have a house to live in, whether it is rented or held by any other legal means. But, if a person cannot find a house to live in except through purchasing it and he/she has not the sufficient amount of money, then he/she can buy a house that satisfies his/her need only.

Here, one should know that such a concession is governed by and subject to the ruling of 'necessity makes permissible the prohibited things' but such a necessity is evaluated in accordance with its proper value.

Allah Says (what means): {But whoever is forced [by necessity], neither desiring [it] nor transgressing [its limit], there is no sin upon him. Indeed, Allah is Forgiving and Merciful.} [Quran 2:173]

You should know that no one is permitted to make use of the above concession if there is no dire need. But, if one shows any form of underestimation in this concern, he/she comes back with a great sin and draws on himself the wrath of Allah, that no one can bear.

Allah knows best.