Mortgage lending down 28.6%, but summer could bring welcome boost – Octane Capital

The latest market analysis by Octane Capital has revealed that mortgage lending fell by 28.6% over the past year, but but the firm suggested that seasonal housing market trends should bring a boost over the coming months.

Octane Capital analysed gross mortgage lending data from March 2022 to Feb 2024 to understand how the amount of money being lent to homebuyers has changed.

Over the past 12 months, mortgage lending in the UK came to an accumulated total of £217.7bn; in the previous 12 months lending totalled £304.9bn.

A number factors lead to the decline, including the increased cost of borrowing due to heightened interest rates and the overall cost-of-living crisis, both of which have limited buyer purchasing power.

However, Octane Capital pointed out that mortgage approval numbers have increased as a hold on interest rates has helped to steady the market.

Further analysis from Octane Capital showed that historical seasonal housing market trends were likely to bring a welcome boost over the coming months.

Over the past five years, the summer season has seen mortgage lending totals increase by an average of 11.7% compared with the spring months.

The largest single bump was in summer 2023, when mortgage lending totals rose by 24.6%.

Jonathan Samuels, CEO of Octane Capital, said: “There is a real sense of optimism in the UK property market at the moment.

“It’s been a promising start to the year with mortgage lending seeing an uptick, mortgage approvals doing the same, and even house prices starting to slowly climb after a period of stagnation.

“The picture is set to improve further as spring makes way for summer and seasonal market trends bring a healthy boost to the market.

“As such, we expect house prices to continue to stabilise which will inevitably tempt more sellers back to the fold.”