Figure follows a 6.1% annual rise in cancellations and hits lenders hard
The value of cancelled mortgages hit a record high of £8.7bn in Q1 following a 6.1% year-on-year rise in cancellations.
The value of cancellations between January and March rose 12.3% from £7.7 billion in Q1 2025, according to analysis of Bank of England data by Novus Strategy.
It found that 35,144 mortgages were cancelled in the first quarter. This was despite a 2.7% fall in the number of mortgage approvals in the final quarter of last year compared with the same quarter a year earlier, the company said.
Completion times compound problem
Novus said that each cancelled mortgage represents a direct operational loss for lenders, as they incur unrecoverable processing, valuation and underwriting costs that regularly run into thousands of pounds per case.
It also affects lender capital levels, since lenders must maintain sufficient capital and liquidity against every outstanding mortgage offer until it either completes or is cancelled.
Novus said that long completion times compound the problem for lenders, with the time between SSTC and exchange reaching 134 days in Q1, according to TwentyCi, when 67,489 transactions fell through post-offer.
Claire Van der Zant, CEO of Novus Strategy, said: “The sheer weight of cancellations continues to inflict a lot of pain on lenders.
“This is one of the most-watched metrics inside banks and building societies, and these industry-wide figures illustrate the scale of the problem but also the opportunity.
“Reducing the volume and value of cancellations is one of the easiest ways lenders can boost their bottom line over the next decade, but the solution is not an inward-facing one. A revolution is unfolding in homebuying, but it’s one that requires everyone involved to take an ecosystem view, not least because the homebuying journey is being redesigned.
“It’s no longer about internal digitisation, it’s about wider transformation delivered by integrating horizontally for interoperability. We’ve got to bring speed-to-completion down and allow everyone, including businesses, to share in the benefits of a more efficient property market.”
