Figures for December from Twenty7tec show that purchase mortgage searches were down 36.8 per cent compared to the prior month, while remortgage searches decreased by 29.3 per cent in the same period.
Buy-to-let mortgage searches fell 32.8 per cent in December compared to November and searches for first-time buyers contracted by 39.6 per between November and December.
Nathan Reilly, director at Twenty7tec, said that December was “always a quieter month” than November, but December 2023 was “busier than prior year ends”.
He continued: “January tends to be when we see a 70 per cent rebound in the market compared to December. In fact, Januarys normally outperform the prior November too, so we are looking forward to a busy period in the run-up to the interest rate decision on 1 February 2024.
“In December 2023, remortgage searches outperformed purchase searches for the third consecutive month. In fact, we had the lowest proportion of purchase searches (as part of all mortgage searches) since October 2022.”
Reilly added that figures in December were impacted by the lowest proportion of first-time buyers in the market, coming to 15.83 per cent.
Homebuyers opting for shorter mortgage terms
Searches for two-year fixed mortgages made up around 49.65 per cent of all fixed product searches in December, following the trend last year.
The second largest segment for fixed product searches was for three to five-year fixed mortgages, accounting for 31.95 per cent of searches.
Five to 10-year fixed mortgages constituted 18.4 per cent, the lowest proportion for at least three years.
Reilly said that this showed that homebuyers were looking for shorter terms at just under half looking for terms at two years or under.
He explained this was partially driven by fewer first-time buyers in the market, with December seeing the highest average for combined incomes.
Combined incomes breached the £80,000 average for the first time ever between Christmas and New Year.
Reilly continued: “In better news, we saw a rise of 2.18 per cent rise in total mortgage product availability. The total volume of mortgage products is now at 94.32 per cent of the highest-ever number of available products.
“Equally, December is normally a fallow period for self-employed mortgage searches. But things tend to pick up quickly in January as more and more self-employed submit their tax returns ahead of the 31 January deadline.”
