Richard Howes Managing Director of Mortgages Mortgage Market Update 4 Welcome to the second Paradigm newsletter of 2026. Since our last newsletter as seems to be the norm in our industry nothing stays the same for long. The mortgage and housing market as we know started the change period at the end of February and the disruption caused by renewed inflationary pressure linked to geopolitical instability in the Middle East, which drove a sharp repricing of fixed-rate mortgage products appears embedded in our market for the foreseeable future. However, resilience seems to be the word best to describe market conditions and activity and statistics would seem to bear this out. Purchase approvals held up better than many commentators expected. According to Bank of England data, mortgage approvals for house purchases in April 2026 were up 9% year on year and 3% ahead of March. That figure remains consistent with a functioning purchase market, though Zoopla's May index noted that overall buyer demand was running approximately 10% below the same period in 2025, reflecting the dampening effect of higher borrowing costs on discretionary movers and those stretching affordability. On the remortgage side, activity has been notably stronger. Approvals for remortgaging in March 2026 were the highest monthly total since October 2022, as homeowners acted quickly to lock in rates before any further increases. This is consistent with UK Finance's forecast, published in December 2025, which projected a 10% rise in external remortgaging over the full year and identified 1.8 million fixed-rate mortgages due to expire during 2026. House price movements have told a mixed story across the period. Nationwide data showed prices rising 0.4% in April on a monthly basis, with annual growth accelerating to 3.0%, the highest reading since May 2025. Rightmove reported asking prices up 1.2% in May, slightly ahead of the ten-year seasonal average of 1.0%, while Nationwide's May reading turned negative, with a seasonally adjusted monthly fall of 0.6% bringing annual growth back to 1.7%. Zoopla's outlook expects house price inflation to hold at around 1.5% for the remainder of the year. However, Halifax reported last week that house prices slipped by 0.1% in May after a 0.1% fall in April and commented house prices were held back by affordability pressures. Interestingly, it is reported stock levels are elevated. Rightmove's May index reported that the number of homes for sale per agent is at its highest level for eleven years at this point in the year, which is extending time to sale for vendors in more competitive
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