Figures showed total mortgage applications fell by 19% between Q1 and Q2, with the decline driven mostly by remortgage borrowers.
Slow quarter for the mortgage market
Remortgage applications dropped by 38% over the quarter, while applications from first-time buyers and homemovers fell by 9% and 8% respectively.
The trend was also evident on an annual basis. Total mortgage applications were down 9% compared with Q2 2025, while applications from first-time buyers and homemovers both declined by 8%. Remortgage applications fell by 12% year-on-year.
Demand among first-time buyers was also reflected in loan-to-value (LTV) trends. Applications for products with an LTV above 90% were down by just 6% compared with the previous quarter.
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However, while applications may have fallen, Bank of England data showed that gross lending increased between May and June.
London sees sharpest decline
Every mainland region of Great Britain recorded a fall in mortgage application volumes between Q1 and Q2, although the scale of decline varied.
London experienced the biggest drop, with application volumes falling by 25%, while Scotland saw the smallest decline at 9%.
Compared with a year earlier, all regions also recorded lower application volumes. London again saw the largest annual fall, down 17%, while the South East reported a 14% decline.
The East of England was among the strongest performing regions, with application volumes down by just 2% year-on-year. It was also the only region to record an increase in the value of applications, which rose by 1%.
Oli O’Donoghue, HSBC UK’s head of mortgages and savings, said: “Overall, it was a slower quarter for the mortgage market, with a reduction in applications on the previous quarter and on Q2 last year. But when you look closely, there are positive signs – despite ongoing cost-of-living pressures, the first-time buyer and homemover markets remained relatively resilient, showing there continues to be a strong appetite to get on the housing ladder or move to a new home.”
