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Mortgage lending fell in the last three months of 2022

Christina Hoghton
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Christina Hoghton

The impact of the mini-Budget on the mortgage market was significant and rates still remain higher than before the disastrous fiscal event

Lenders reported that demand for secured lending for house purchase decreased in the last quarter of 2022, and is expected to fall further in the first three months of 2023.

Demand for secured lending for remortgaging also fell in the last three months of the year, according to the Bank of England’s Credit Conditions Report for the final quarter of 2022.

The figures were unsurprising, given the impact of the disastrous mini-Budget on the mortgage market.

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, explained: “Mortgage demand dropped like a stone in the wake of the mini-budget, as rampant rate rises forced buyers to flee the market in droves. And despite rates falling back in recent weeks, the damage has been done – demand isn’t expected to recover in the next few months.

“Mortgage demand plummeted at the kind of rate we saw when the market was effectively shut at the start of the pandemic. The shock of the mini-budget, and the carnage it caused in the mortgage market, meant buyers faced massive rate hikes that left their plans in tatters.

“More recently rates have been dropping, but they remain significantly higher than before the chaos unfolded. Buyers are also reeling from the shock of the rate rises, which put a real dent in their confidence.”