In their recent trading statement, Mortgage Advice Bureau reported:

UK gross new mortgage lending for the first five months of the year was 28% lower than in the same period in 2022, as rising costs of living and higher interest rates created further affordability constraints and reduced consumer confidence. The residential purchase segment was down 30%, residential re-mortgaging down 18% and buy-to-let down 46%. Re-financing (re-mortgaging and product transfers combined) activity performed better overall as it was bolstered by product transfers, with product transfer lending data, currently only available for the first quarter of the year, showing an increase of 12% for Q1 2023 compared to Q1 2022.

The new mortgage approvals reported in Q2 2023 suggested that activity levels had started to improve.  However, market conditions are now likely to toughen further in H2 2023, driven by a continued rise in interest rates and fewer consumers opting to purchase or move home at a time when mortgage rates are at or close to peak levels in this current interest rate cycle.  However, we expect re-financing will continue to perform strongly.

…we find ourselves in an environment of continuing interest rate rises, reduced affordability, and cost of living increases, all of which are naturally impacting consumer confidence. Despite strong underlying demand for property, some buying decisions are understandably being delayed by our customers until we have a more stable economic and interest rate environment.

Re-mortgages and increasing numbers of product transfers currently represent around 60% of our written transaction volumes.