The “pulling” of rates with little notice is back as you will see with announcements from many Lenders, many are re-pricing to save their service SLAs and will probably re-price at a level which means they are not top of sourcing and do not take in volumes they cannot cope with against their service capability. Speaking to Lenders, some in the mainstream were reporting volumes coming in one day five times higher than their daily average, and one medium sized BTL Lender took in four times their normal level which will put a strain on service standards. The result of all of this chaos and confusion? The average two- and five-year fixed residential mortgage rates surpassed 5% and nearly 500 products have been removed recently as the market adjusts. If we look at the market prior to the week of the 9th March, it appeared lending volumes were holding up, it appears this is, in the main, in the area of refinancing given there are 1.8 million households coming off both 2 & 5 year rates in 2026. The purchase market whilst busy, continues to be hampered by the slowness of the overall transaction and affordability constraints combined with the economic uncertainty (particularly given the unemployment stats) limiting momentum. Despite this, February was on track to record the highest number of new home listings in a decade, Zoopla reveals. The latest house price index found that there are 6% more homes for sale than a year ago, something Zoopla says it expects to rise further in the coming months. To show how the market has “flipped”, the proportion of homes on the market that are cheaper to buy than rent has risen from 25% last year to 40% in 2026, also according to Zoopla, their report stated homeownership has become more affordable because of easing mortgage 05 MORTGAGE NEWSLETTER Continued on next page... rates and affordability assessments. Lenders are stress testing borrowers at a rate of 6.5% on average, lower than the typical rate of 8.5% last year. This has made a larger share of homes cheaper to buy than rent, assuming a 20% deposit is put down. Gross mortgage lending is forecast by UK Finance to rise around 4% in 2026 to approximately £300bn, reflecting resilience rather than expansion. House‑purchase lending growth is expected to slow sharply to about 2%, following the stamp‑duty‑driven surge seen in early 2025, as higher mortgage payments continue to bite relative to incomes. Buy‑to‑let (BTL) lending remains subdued, with volumes broadly flat as tax and regulatory pressures continue to cap investor appetite. From the data available from CACI the residential lending market appears to running at a level between £6.5 billion and £6.8 billion per week, with BTL performing at an average of £850 million per week. Despite lower headline mortgage rates than a year ago, early‑2026 data shows buyer caution remains elevated which the global events will probably exasperate. Bank of England figures show mortgage approvals for house purchase fell to just under 60,000 in January 2026, the lowest level in two years, reflecting lingering uncertainty following the Autumn Budget and renewed global risks. That said, estate agents report rising viewings and enquiry levels, suggesting demand has softened rather than collapsed. House prices are broadly flat in nominal terms, with annual growth of around 1%, meaning prices continue to fall in real (inflation‑adjusted) terms. This is gradually improving affordability, particularly for first‑time buyers, but not yet enough to
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