The value of mortgages cancelled by borrowers rose to a high of £8.7bn in Q1, analysis of data from the central bank showed.
Novus Strategy analysed figures from the Bank of England and found there were 35,144 mortgages cancelled in Q1, up 6.1% on the year before. The value of these cancellations was also 12.3% higher than the same period in 2025, which totalled £7.7bn.
This was despite a 2.7% fall in the number of mortgages approved in Q4 2025, when compared to the same period a year earlier.
A cost to lenders
Novus Strategy said each cancelled mortgage represented a “direct operational loss” in processing, valuation and underwriting costs, which often ran into thousands of pounds for each case.
The firm said this also impacted lenders, as the £8.7bn in cancelled loans was a significant amount of capital to commit for a loan that would not be advanced.
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Novus Strategy said long completion times made the problem worse and the longer an offer sat in the pipeline, the more exposed it became to changing borrower circumstances, chain collapses and rate movements.
According to TwentyCi, the time between sold subject to contract and exchange stood at 134 days in Q1. During this period, 67,489 transactions fell through post-offer, a 12.1% annual decline. Novus Strategy said every week a case was in the pipeline was another week of tied-up capital and underwriting assumptions ageing.
Novus Strategy said digital transformation in the housing exchange process would reduce the time to completion, potentially lowering operational costs.
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.”
She said that reducing the volume and value of cancellations was one of the easiest ways lenders could boost their bottom line, but the “solution is not an inward-facing one”.
Van der Vant added: “A revolution is unfolding in home buying, but it’s one that requires everyone involved to take an ecosystem view, not least because the home buying 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.”
