The figures showed mortgage cancellations increased 6.1% year on year to 35,144 cases between January and March, despite mortgage approvals declining 2.7% over the same comparative period

The value of mortgages cancelled by home buyers hit a record £8.7 billion during the first quarter of 2026, according to analysis of Bank of England data by transformation consultancy Novus Strategy.

The figures showed mortgage cancellations increased 6.1% year on year to 35,144 cases between January and March, despite mortgage approvals declining 2.7% over the same comparative period. The total value of cancelled mortgages rose 12.3% from £7.7 billion in Q1 2025.

Novus Strategy said the figures highlighted the growing operational and financial pressures facing lenders, with every cancelled mortgage representing sunk underwriting, valuation and processing costs that cannot be recovered.

The consultancy also warned that lenders were forced to continue holding capital and liquidity against mortgage offers until completion or cancellation, meaning billions of pounds remained tied up in loans that would never complete.

Long transaction timelines were identified as a major contributing factor behind rising cancellations. According to TwentyCi data referenced in the report, the average time between sale agreed and exchange reached 134 days during Q1, while 67,489 transactions dropped through after mortgage offer stage, although this represented a 12.1% annual decline.

Novus Strategy said prolonged completion periods increased exposure to changing borrower circumstances, interest rate volatility and chain collapses, all of which could ultimately lead to cancellations.

The report also pointed to recent mortgage pricing volatility linked to the Iran crisis as another factor contributing to borrowers switching products, withdrawing from purchases or allowing offers to expire.

Claire Van der Zant, chief executive at Novus Strategy, said: The sheer weight of cancellations continues to inflict a lot of pain on lenders.

Van der Zant added: This is one of the most-watched metrics inside banks and building societies, and these industry-wide figures illustrate the scale of the problem but also the opportunity.