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Mortgage Availability Ticks Up Amidst Falling Demand
15 Jan
Summary
- Mortgage availability is predicted to increase in the next three months.
- Demand for mortgages from homebuyers decreased in late 2025.
- Lenders reported falling mortgage default rates in late 2025.
According to a Bank of England survey of lenders, mortgage availability is set to increase over the next three months ending in February 2026. This follows a reported rise in availability to households in the three months concluding November 2025. Despite this improved outlook from lenders, demand for mortgage lending from home buyers declined in the final quarter of 2025 and is expected to continue falling into early 2026.
In more positive news for the housing market, lenders also observed a decrease in mortgage default rates among households during the final months of 2025, with further declines anticipated. This contrasts with a rise in credit card defaults, which increased and are expected to continue their upward trend into early 2026, reflecting growing financial pressures on consumers.
Several major lenders have recently announced mortgage rate cuts, including HSBC UK and Nationwide Building Society, which experts suggest is fuelling momentum in the market. This development prompts advice for consumers to shop around for the best deals rather than automatically accepting product transfers from their current lenders, as improved housing market sentiment emerges.
