Mortgage transactions down 33% since BoE’s first base rate increase

The number of mortgage transactions has fallen by 33% since the Bank of England (BoE) first raised interest rates again in December last year, new analysis has shown.

The BoE increased its base rate from 0.1% to 0.25% last December, before a flurry of rate rises saw the Bank’s Monetary Policy Committee raise interest rates to 1.75% at its most recent meeting.

Octane Capital looked at the average monthly level of mortgage backed transactions between December of last year and the latest available data, which was for March this year. The firm then compared this level of market activity to the four months prior, the period between August and November 2021.

The figures show that since the first of six consecutive base rate increases was implemented in December last year, there have been an average of 37,019 homes purchased each month with the help of a mortgage.

This reflects a 33% decrease when compared to the monthly average of 55,070 per month purchased in the four months prior to this interest rate increase.

Furthermore, Octane Capital’s analysis revealed that the average monthly number of homes purchased with the help of a mortgage has declined across every single local authority since the BoE first increased interest rates. 

“Following the BoE’s decision to first increase interest rates in December of last year, there was an almost immediate retraction in market activity coming via the mortgage sector,” commented Octane Capital CEO, Jonathan Samuels.

“This was to be expected given the fact that it was the first base rate increase since November 2017 and particularly given the backdrop of wider economic uncertainty and the cost of living crisis. 

“We now know that this was just the tip of the iceberg with respect to increasing interest rates and this latest insight into declining mortgage sales volumes doesn’t yet account for the base rate hikes seen in May, June or August. 

"So we expect the decline in market activity coming from mortgage backed homebuyers to be significantly lower still when these figures are finally released.”

    Share Story:

Recent Stories


FREE E-NEWS SIGN UP

Subscribe to our newsletter to receive breaking news and other industry announcements by email.

  Please tick here to confirm you are happy to receive third party promotions from carefully selected partners.


The new episode of The Mortgage Insider podcast, out now
Regional housing markets now matter more than ever. While London and the Southeast still tend to dominate the headlines from a house price and affordability perspective, much of the growth in rental yields and buyer demand is coming from other parts of the UK.

In this episode of the Barclays Mortgage Insider Podcast, host Phil Spencer is joined by Lucian Cook, Head of Research at Savills, and Ross Jones, founder of Home Financial and Evolve Commercial Finance.

Air and the role of later-life lending
Content editor at MoneyAge, Dan McGrath, spoke to the chief executive officer at Air, Will Hale, about the later-life lending industry, the importance of tailored advice and how technology and obligations have shaped the sector.


Helping the credit challenged get mortgage ready
A rising number of borrowers are finding it harder to access mortgages due to being credit challenged - whether that’s from historic debts, a county court judgment, or having little to no credit history.

In the latest episode of the Mortgage Insider podcast, Phil Spencer is joined by Eloise Hall, Head of National Accounts at Kensington Mortgages, and Alastair Douglas, CEO of TotallyMoney.

The future of the bridging industry and the Autumn Budget
MoneyAge content editor, Dan McGrath, is joined by head of marketing at Black & White Bridging, Matt Horton, to discuss the bridging industry, the impact of the Autumn Budget and what the future holds for the sector.