Broker mortgage searches suffered a “significant” slump in July, falling 13.1% to 1.5 million enquiries compared to the month before, according to Twenty7tec, as rate rises “cooled” the market.  

The criteria platform adds that remortgage interest fell 14.7% to 753,319 searches compared to June, buy-to-let enquiries plummeted by 18.3% to 252,933 searches, while first-time buyer interest was down 9.3% to 271,878 searches over the same period.  

The data comes after the Bank of England’s base rate hike of 25bps to 5.25% last week, its 14th consecutive rise taking it to the highest level for 15 years.        

The central bank is battling inflation, which dropped to 7.9% in the year to June from 8.7%, but still remain almost four times higher than its 2% target.      

Data from the platform reflects borrowers favouring short-term fixes, gambling that 6%-plus mortgage rates will come down over the next two years.  

The firm says two-year fixed mortgages accounted for 44.1% of all fixed-product searches, compared to 22.45% last June.  

Three- to five-year home loans account for 34.55% of all fixed-product searches, compared to 41.58% a year ago.  

While five- to ten-year fixed mortgages account for 21.38% of searches, compared to 35.97% 12 months ago.  

Twenty7tec chief executive James Tucker says: “Continued increases in interest rates has cooled the market — in particular in the second half of the month.”  

Twenty7tec director Nathan Reilly adds: “July 2023 saw constrained activity compared to the prior month and I think that the market is hoping for better news for the remainder of the second half of the year.   

“It tends to be a little flatter in June and July as heads turn to holidays, with an uptick often beginning in August.”