Uncertainty in the property market during the closing stages of 2022 has led to the number of mortgage approvals declining by more than 20% in the past year, according to research by Octane Capital.

However, the analysis also shows the number of remortgaging approvals has soared as existing homeowners stay put and look to stabilise their financial foundations by borrowing more.

According to Octane Capital’s research, in 2021 there were a total of 944,704 house purchase mortgage approvals in the UK. In 2022, this dropped to 753,946 approvals, marking an annual decline of 20.2%. At the same time, the number of remortgaging approvals increased from 460,462 to 539,528 between 2021 and 2022 – an annual rise of 17.2%.

The market trends are also evident in analysis of the overall monetary value of mortgage approvals. In 2021, the total value of property purchase approvals was £208bn. In 2022, this dropped to £176bn, a decline of 15.3%. At the same time, the overall value of remortgaging approvals increased from £92bn to £113bn, marking a 22.6% rise.

However, while the total value of homebuyer mortgages has fallen, the average value of each individual approval has actually increased by 6.2%, from £219,899 in 2021 to £233,510 in 2022. The average value of a remortgaging approval has also increased, rising by 4.6% between 2021 and 2022.

Jonathan Samuels, CEO of Octane Capital, commented: “Despite house prices continuing to climb in 2022, the immediate economic uncertainty that rattled the mortgage sector following September’s mini budget has had a notable impact when it comes to the number of mortgage approvals attributed to new house purchases in 2022.

“At the same time, there has been a notable uplift in homeowners deciding to play it safe and stick with their current home, opting to remortgage in order to improve both their home and their financial stability.

“However, mortgage rates are already on the decline so far this year, dropping by 14% in January alone. On top of that, the wider economic outlook for 2023 is looking far brighter than many people feared towards the end of last year. All in all, we expect spring and summer to bring sunnier days to the property market and a rejuvenated level of buyer activity to sweep the market.”