In February 2023, the total number of mortgage lending transactions reached its lowest monthly total since May 2020, with only 95,405 transactions recorded. 

Octane Capital analysed the data from the past 15 months, from December 2021 to February 2023, and compared it to the 15 months prior to the interest rate hike.

In the 15 months prior to the interest rate increase, a total of 1.855 million mortgage transactions were completed through monetary financial institutions such as banks and building societies. Additionally, there were 183,346 transactions completed through other specialist lenders, bringing the total to just under 2.1 million mortgage lending transactions during that time period, with an average of 138,660 transactions per month.

However, since December 2021, the total number of mortgage lending transactions has fallen to just over 1.9 million, averaging around 128,800 transactions per month. 

This indicates a decline of 7.1% in total mortgage lending transactions since the interest rate hike, with a more significant decline of 19.5% in transactions fuelled solely by specialist lenders, compared to a decline of 5.9% seen via monetary financial institutions.

Octane Capital attributes the decline in mortgage lending transactions to the turmoil in the mortgage sector following last September’s mini budget.

 Since reaching a peak of 150,308 transactions in October 2022, the highest monthly total since September 2021, the total number of mortgage lending transactions has consistently declined each month, reaching a record low of 95,405 transactions in February 2023. This marks a significant decline of 37% between October 2022 and February 2023 and is the lowest monthly total recorded since May 2020, according to the analysis.

Jonathan Samuels, CEO of Octane Capital, commented: “The broad feeling across the industry is that 2023 is likely to bring greater certainty and stability which should help stabilise the market. 

“However, an 11th consecutive increase so early in the year is unlikely to fill the nation’s homebuyers with confidence and so it could be some months yet before we see this negative trend start to reverse fully.”