This pattern aligns with the Bank of England’s Credit Conditions Survey for the fourth quarter of 2025, which had signalled a rise in remortgage activity in early 2026 and a decline in secured lending for house purchase.
Stonebridge’s figures show that purchase applications slipped 3.6% year on year in Q1. Product choice remained dominated by fixed rates, which accounted for 94.5% of applications, although the share of variable-rate borrowing edged up from 4.7% to 5.5%.
Two-year fixed terms gained ground. Their share of lending increased from 51.6% to 65.2%, while the proportion of five-year products fell from 39.4% to 29%.
Despite geopolitical tensions and higher swap rates linked to the Iran conflict in March, average mortgage pricing fell on an annual basis. The typical interest rate recorded by Stonebridge declined by 0.43 percentage points, from 4.74% to 4.31%. Average loan-to-value ratios were broadly unchanged, easing by one percentage point to 61%.
Stonebridge reported that the lower rate environment in early 2026 supported affordability and confidence, feeding through into higher advance sizes. Average loan amounts rose by 4% year on year, and by 7.3% in the remortgage segment, outpacing a 2.3% increase in average property valuations.