Home buyers failed to take up £32.4 billion worth of mortgages last year, partly due to worsening fall-throughs of property sales, according to analysis by Novus Strategy.
Mortgage cancellations climbed 36.4%, the largest annual jump in value in four years, with lenders contending with 134,057 cancellations in 2025, up 26.4% in 12 months.
That is according to Novus Strategy analysis of the latest Bank of England data for Monetary Financial Institutions (MFIs).
Cancellations are an unwelcome expense for lenders, according to Novus chief executive Claire Van der Zant.
Not only will they have gone through a costly application, valuation and underwriting process on each loan, exposure to long pipelines results in higher capital usage and tighter liquidity.
Mortgages can be cancelled for a variety of reasons. For example, a borrower may have made more than one mortgage application for the same property, or simply changed their mind and backed out of a purchase.
However, many fall-throughs occur because of the unnecessarily long time it takes to move from offer to completion.
These avoidable fall-throughs have been getting worse. Recent data released by TwentyCi show there were 303,538 fall-throughs of property transactions in 2025, an increase of 4.5% on the previous year.
This is despite new instructions and agreed sales rising just 2.3% and 2.1% respectively last year, according to the company.
The rising number of cancellations came as the number of mortgage approvals for home purchase increased 5.1% to 876,458 last year. They were worth a combined £216.8 billion in 2025 (up 11.1%), which would equate to a cancellation rate of 14.9% by value, though there is a lag between approvals and cancellations.
Over the last few years, mortgage lenders have invested in shortening their ‘time to offer’ but this has limited impact on the speed at which most transactions progress. Now, ‘time to completion’ is the new battleground and the industry is already taking steps to quicken the home buying process and bring cancellations down.
Van der Zant said: “Avoidable fall-throughs cost the property industry as a whole billions of pounds a year and lenders will want to see these numbers coming down.
“While the myriad reasons that property transactions fall through may sound uncontrollable, the most powerful thing we can do to mitigate this is increase the speed at which transactions can complete. Everyone in the industry is acutely aware of this and it relies on moving out of the first phase of transformation, where business focused on internal digitalisation, to the second phase where we horizontally integrate for interoperability.
“Together, the industry is rewriting the fabric of the home buying industry using data standards, trust frameworks and smart data pilots. The acid test will be that transaction times become a customer choice, not an excruciating six months of uncertainty.”
