The value of mortgage cancellations climbed by 36.4% in 2025, the largest annual jump in four years.
Lenders dealt with just over 134,000 cancellations, a 26.4% year-on-year rise, as fall-through rates climbed, analysis of Bank of England data by Novus Strategy revealed.
Cancellations are an unwelcome expense for lenders, according to Claire Van der Zant, Novus Strategy’s chief executive, with them having spent time and money underwriting the applicant and valuing the property for each loan. She added that having long pipelines of applications also result in higher capital usage and tighter liquidity.
Mortgage cancellations can stem from a change of mind, multiple applications made with different lenders as buyers hedge their bets on which bank will deliver the best results at the fastest pace, or because the transaction or chain collapsed, forcing the buyer to back out.
Novus Strategy also found that voidable fall-throughs have been getting worse.
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According to data firm TwentyCi, there were 303,538 fall-throughs of property transactions in 2025, an increase of 4.5% on the previous year.
This is despite new instructions and agreed sales rising just 2.3% and 2.1% respectively last year.
Meanwhile, the rising number of cancellations came as the number of mortgage approvals for home purchase increased 5.1% to 876,458 last year.
Van der Zant said: “Avoidable fall-throughs cost the property industry as a whole billions of pounds a year and lenders will want to see these numbers coming down.
“While the myriad reasons that property transactions fall through may sound uncontrollable, the most powerful thing we can do to mitigate this is increase the speed at which transactions can complete. Everyone in the industry is acutely aware of this and it relies on moving out of the first phase of transformation, where business focused on internal digitalisation, to the second phase where we horizontally integrate for interoperability.”
A government consultation on reforming the home buying and selling process through digitalisation closed at the end of December, with responses now being assessed.
Santander estimates that failed housing transactions cost the economy £1.5bn every year.
