Market activity rises, but purchase demand remains weak
The UK mortgage market experienced a modest revival in September, new data have shown, though the upturn was largely confined to remortgaging activity.
Figures compiled by mortgage tech provider Twenty7tec reveal that total mortgage searches reached 1.68 million last month, up from 1.56 million in August. This marks a 1.5% increase compared to September last year and a 7.6% rise month on month. However, the data shows that remortgaging accounted for almost all of the growth.
Remortgage searches surged to 820,429, representing a 10.7% increase from August and a 14.6% rise year on year. Remortgaging made up 48.9% of all searches, compared to 43.4% in September 2024. Within this, residential remortgage searches totalled 610,022, up 15.2% annually, while buy-to-let remortgage activity rose by 12.8%.
By contrast, purchase activity remained subdued. Non-first-time buyer residential purchase searches stood at 547,859, down 8.6% on the year, despite a 5.9% monthly increase. First-time buyer searches saw a marginal monthly gain of 2.57%, but were 7.63% lower than a year earlier. The proportion of first-time buyer activity slipped from 19.2% in August to 18.4% in September, highlighting ongoing affordability and deposit challenges.
Buy-to-let searches totalled 308,434, a 4% annual increase. Yet, buy-to-let purchase searches fell to 98,130, a 10.8% drop compared to September last year.
The data also points to changing borrower preferences. The share of long-term fixed rate products (six to 10 years) dropped to 12.3%, the lowest level recorded and almost half the 23.7% seen in September 2024. This suggests borrowers are hesitant to commit to extended terms at current rates, possibly anticipating more favourable conditions ahead.
“September’s numbers need to be read carefully,” said Nakita Moss (pictured right), head of lender at Twenty7tec. “Yes, overall activity is up, but it is being propped up by remortgaging. That is not new confidence - it is people playing safe, making defensive moves to secure their household finances.
“Purchases, and first-time buyer demand in particular, remain weak, and that is a concern for the long-term health of the market. The collapse in long fixes shows how sceptical borrowers are that current rates represent good value. What we are seeing is resilience, not recovery.”
For mortgage brokers, the data signals a market where remortgaging is the main source of business, while purchase and first-time buyer activity remain weak. Brokers should focus on proactive client management, identifying remortgage opportunities, and supporting first-time buyers through affordability challenges.
“Advisers cannot wait for clients to come to them,” said Nathan Reilly, commercial director at Twenty7tec. “They need to be running their books, using data to identify who is approaching the end of their term, and starting conversations early.
“At the same time, they should be preparing first-time buyers with realistic affordability scenarios and supporting them through a tougher journey to purchase.”
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