Research by debt advisory specialists Sirius Property Finance indicates that while a cooling housing market has led to fewer mortgage approvals, increased sector turbulence has resulted in the number of mortgage offers being cancelled (as a proportion of all mortgages approved).
Analysing mortgage approval data from the Bank of England, Sirus Property Finance’s research shows that 891,990 mortgages were approved in 2022, an average of 74,333 per month.
This marked a 18.4% drop on the previous year, when gross approvals hit a 10 year high of almost 1.1 million. The 891,990 approvals seen in 2022 was also the lowest annual total since 2018.
At the same time, fewer mortgage approvals also led to a decline in mortgage cancellations, with 136,970 cancellations being seen throughout 2022, a drop of 13.8% on the previous year.
However, not only was this total number of cancellations the second highest in the last 10 years, the analysis shows that it was the highest proportion when compared to total approvals seen in the last decade.
In fact, in 2022 mortgage cancellations accounted for 13.3% of all gross mortgage approvals, creeping up by 0.6% versus 2021 and the highest level of mortgage market instability seen since 2013.
Sirius Property Finance managing director Nicholas Christofi comments on the findings: “As interest rates have continued to climb, it’s not only had an impact on the appetite of the nation’s homebuyers, but it’s led to a growing level of mortgage market instability”.
Christofi stresses the fact that the number of cancellations as a proportion of mortgage approval market activity has climbed to its highest level in the last decade.
“This demonstrates the far trickier landscape buyers are having to negotiate when it comes to the higher cost of borrowing and the reluctance that many have had in following through with a mortgage offer as interest rates have risen,” he says.
