The amount of money lent in new mortgages fell significantly during the first quarter of this year, the latest data shows, as borrowers grow increasingly more concerned by rate volatility.

The latest Bank of England figures, released yesterday, reveal that £58.8bn was borrowed in new mortgages in the first three months of 2023.

This was down 26.3% from the £76.9bn borrowed in the corresponding period 12 months ago, and the lowest level since the period between April and June 2020 when the pandemic lockdown led to a temporary housing market shutdown.

New mortgage applications approved for the coming months totalled £48.9bn, which is down 40.7% from £82.5bn a year ago and again the lowest since April-June 2020.

The data also reveals that the share of people borrowing to remortgage increased to 34.8%, up 5.8% since the same time the previous year.

Meanwhile, the number of borrowing to buy a new home was 50.1%, down 0.6% in a year and again the lowest since the start of the pandemic.

Borrowing by buy-to-let landlords accounted for 9.8% of the total, the lowest seen since 2011, as investors were deterred by higher mortgage rates and the prospect of increased regulation.

There was also a concerning hike in the number of people failing to keep up with their mortgage repayments.

The official numbers show that £14.9bn was in arrears, up 9.5% in three months and 12.5% in a year.

More recent mortgage market volatility suggests that the lending slowdown could be set to get worse, as rates begin to rise again.

Major lenders have withdrawn mortgage products in recent days with little or no notice in preparation to bring them back at higher rates; bad news for borrowers.

Steven Morris, advising director at Advantage Financial Solutions, said: “My advice to customers right now is don’t even bother getting mortgage advice unless you are prepared to apply within a couple of hours.”