Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.
Remortgaging surge continues as house purchase approvals dip
Net mortgage approvals for house purchases fell to 56,100 in July, down from 58,200 in June, while remortgage approvals rose to 34,500 from 34,100, according to the latest Bank of England figures. The Bank also reported that the effective interest rate on new mortgages rose to 4.45% in July, from 4.35% in June.
Brokers report a shift towards remortgaging
Mortgage brokers say the rush towards remortgaging shows no signs of slowing, in line with the Bank's data on dipping house purchases. David Hollingworth, associate director at L&C Mortgages, said the firm has seen an increased split towards remortgaging for a few months, with purchase activity muted and some buyers holding off while waiting for rates to come down. He noted first-time buyers remain key, but that it has been easy for many purchasers to make a case for waiting.
Aaron Strutt, product and communications director at Trinity Financial, said the firm is definitely getting more remortgages, noting that some bigger banks are not offering particularly good product transfer rates. That leaves customers choosing between staying with their lender and paying more, or remortgaging. He added that remortgaging is not limited to the end of a fixed-rate period: some borrowers use the opportunity to raise funds for home improvements or make other changes. Most borrowers are keeping their existing lender.
Chris Sykes, director at MSP Financial Solutions, said borrowers are increasingly approaching the end of their deal early, particularly those coming off a cheaper five-year fix, and that the firm is "heavy on the remortgage side at the moment".
Search data and market forecasts point the same way
Twenty7tec's July Mortgage Market Snapshot showed overall mortgage search activity remaining resilient, with purchase activity easing while remortgaging gathered momentum. Earlier in the year, mortgage searches surged to 2.15 million in March before falling sharply in April and recovering in June. By May, residential purchase searches had fallen 5% month on month to 626,029, while residential remortgage searches dropped 9% to 563,124.
Trade body UK Finance, in its 2026–27 market forecast, predicted a stronger remortgage market and weaker purchase market, with house purchase lending at £180bn in 2026 (down 2%) and remortgaging at £77bn (up 10%).
What it means for the rental and lettings sector
The Bank of England said in July that nearly 750,000 households paying less than 3% interest would come off a fixed-rate mortgage during 2026, facing an average rise of around £170 a month in repayments. With some prospective buyers reluctant to commit, letting agents and inventory clerks should watch for more borrowers rolling off low-rate deals.
Source: Mortgage Strategy