Mortgage lending dropped 29% in the last year

Mortgage market

The latest figures show that over the last 12 months, mortgage lending in the UK came to an accumulated total of £217.7 billion

Mortgage lending has dropped by 28.6% in the last year, however, seasonal housing market trends could bring a welcome boost to mortgage lending totals over the coming months, as per the latest analysis by Octane Capital.

Octane evaluated gross mortgage lending data from the last two years (March 2022 – Feb 2024) to understand how the amount of money being lent to homebuyers has changed.

The latest figures show that over the last 12 months, mortgage lending in the UK came to an accumulated total of £217.7 billion.

This marks an annual drop of 28.6% compared to figures from the previous 12 months when lending totalled £304.9 billion.

There are a number of contributing factors leading to the drop in mortgage lending over the past year, not least the elevated cost of borrowing because of higher interest rates and the overall cost of living crisis, both of which have restricted buyer purchasing power and, as a result, mortgage lending market activity.

But, looking forward, it appears the past year’s housing market troubles could be finally lifting, with mortgage approval numbers rising as a hold on interest rates has helped to steady the market.

Moreover, further analysis from Octane Capital shows that historic seasonal housing market trends are likely to bring a welcome boost over the coming months.

Over the past five years, the summer season has seen mortgage lending totals increase by an average of 11.7% compared to the spring months.

This summer boost has occurred every year over this five-year span, with the largest single bump coming in summer 2023 when mortgage lending totals increased by 24.6%.

CEO of Octane Capital, Jonathan Samuels, said: There is a real sense of optimism in the UK property market at the moment. It has been a promising start to the year with mortgage lending seeing an increase, mortgage approvals doing the same, and even house prices beginning to slowly jump after a period of stagnation.

He added: The picture is set to improve further as spring makes way for summer and seasonal market trends bring a healthy boost to the market. As such, we expect house prices to continue to stabilise which will inevitably attract more sellers back to the fold.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Invest for Property. The information provided on Invest for Property is intended for informational purposes only. Invest for Property is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

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