The number of new home commitments for the first quarter rose 12% compared to the previous quarter to reach £78bn, but the number of loans advanced over the three-month period dipped by the same amount.
The latest figures from the Bank of England show that the value of loans fell by more than 12 per cent from the previous quarter to just under £70bn.
Of the 91% of loans that were supposed to be owned by residents, the share of loans that were refinanced increased by 2.7 percentage points (pp) from the previous quarter and by 6.8pp year-on-year to 28%.
The share of people living in property to buy fell by 3.9pp last quarter and by 8.6pp year-on-year to nearly 58%.
Within this the development of the first buyer and the development of moving home are both immersed.
The share of total mortgage loans increased by 0.5pp from the previous quarter and by 0.8pp year-on-year to nearly 9%.
National Association of Estate Agents Propertymark president Mary-Lou Press said: “These figures paint a mixed picture for the UK housing market.
“Although the number of mortgages decreased in the quarter, the increase in new mortgage commitments suggests that lending activity may tighten in the coming months.
“It is encouraging to see a small increase in the share of buy-to-let property despite significant legislative changes affecting landlords across the UK.
“However, many property investors remain wary of the impact of changes such as the Tenants’ Rights Act and the Housing Act (in Scotland), and it remains to be seen how these changes will impact investment decisions in the long term.
“At the same time, ongoing cost of living pressures and global economic uncertainty continue to influence lending decisions.
“As the Bank of England decision approaches, the housing market will be watching closely for any impact on purchasing power, confidence and future market activity.”
Phoebus Software’s chief sales and marketing officer, Richard Pike, says: “Statistics indicate that the mortgage market has taken off in 2026.
“The decline in total loans shows that the market was still weak at the beginning of the year, but the increase in commitments shows that confidence was growing in Q1 before the market shock caused by the Iran conflict.
“There has been an ongoing shift in lending as a large number of borrowers have reached the end of their fixed rate agreements.
“This will remain a market benchmark throughout the year, as families continue to adapt to the high-end environment.
“Encouragingly, loan defaults continue to decline, and are at their lowest level since Q3 2023, highlighting the resilience of borrowers despite continued pressure on affordability.
“This will give assurance to lenders that, although costs continue, many customers are able to keep up with their repayments.”
Pike adds: “We have seen a gradual increase in inventory, although prices are still lower than last year.
“While I don’t believe that is the cause of the panic, it is important that lenders remain vigilant and ensure that their service teams are equipped to support those customers who may be at risk.
“Looking ahead, the biggest challenge in the market will be balancing the issues of affordability with the need to support loan growth.
“While I expect to see modest growth during the year, continued momentum will depend on further improvements in consumer confidence and greater certainty around the interest rate outlook.”
