Bank of England Money and Credit data showed net mortgage borrowing fell to £2.9 billion in May, down from £4.4 billion in April. Approvals for house purchases also moderated during the month, suggesting lenders used price cuts partly to stimulate flagging activity.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said the recent easing in mortgage pricing volatility marked “a somewhat natural cooldown” after unrest caused by war in the Middle East.
“Mortgage rates have started to come down from their April peaks, so hopefully this will slowly build up momentum in the months ahead, and no doubt borrowers will be hoping for more stability in the market,” she added.
However, Springall pointed out that the Middle East situation remains fragile and could shift quickly, so anyone planning to take out a mortgage in the near future would be wise to monitor developments both at home and abroad closely.
For now, borrowers benefit from a window of lower two- and three-year fixed rates alongside a stable base rate, with the most competitive deals typically available to those at lower loan-to-value ratios.