The number of mortgage market cancellations reached a 10-year high in 2022, amid the flurry of interest rate rises announced by the Bank of England (BoE).

Analysis of BoE data by Sirius Property Finance highlighted that a total 136,970 mortgage cancellations were recorded last year, a 13.8% drop on 2021 figures.

Sirius Property Finance analysed mortgage approval data to look at the gross number of approvals and cancellations and how these have changed on an annual basis.

The research revealed that 891,990 mortgages were approved in 2022, an average of 74,333 per month, which marked an 18.4% drop on the previous year when gross approvals had hit a 10-year high of almost 1.1 million. The 891,990 approvals seen in 2022 was also the lowest annual total since 2018.

Sirius Property Finance suggested that it was this fall in mortgage approvals which led to the decline in mortgage cancellations. While the total number of cancellations was the second highest in the last decade, the firm’s analysis also showed that it was the highest proportion when compared to total approvals seen in the last decade.

In 2022, mortgage cancellations accounted for 13.3% of all gross mortgage approvals, a level marginally up by 0.6% compared to 2021, and the highest level of mortgage market instability seen since 2013.

“As interest rates have continued to climb, it’s not only had an impact on the appetite of the nation’s homebuyers, but it’s led to a growing level of mortgage market instability,” commented managing director of Sirius Property Finance, Nicholas Christofi.

“While both the volume of mortgage approvals and cancellations have dropped, the number of cancellations as a proportion of mortgage approval market activity has actually climbed to its highest level in the last decade.

“This demonstrates the far trickier landscape buyers are having to negotiate when it comes to the higher cost of borrowing and the reluctance that many have had in following through with a mortgage offer as interest rates have risen.”

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