Total mortgage lending sat at just £50.5 billion during the first three months of this year, which is the lowest level seen since interest rates started to climb in December 2013.
The figure was 13.1 percent lower than the same period last year, according to data published by the Building Societies Association.
Gross lending for house purchases fell by 11.1 percent compared to the final three months of 2023.
This puts the figure at £29.7 billion as homebuyers continue to struggle with high interest rates.
However, analysis of the data by Octane Capital shows that there are signs of positivity starting to emerge and these are being largely driven by those looking to remortgage.
Gross lending with respect to remortgaging actually increased by 3.5 percent quarter one of 2024.
Octane said this suggests that the stability that has come via a hold on interest rates has, at least, helped to boost mortgage market sentiment amongst those who already have a mortgage in place.
Chief executive at Octane, Jonathan Samuels, said there is unlikely to be a resurgence in activity until interest rates start to fall.
He said: “Stability is key within the mortgage sector and such a sustained period of interest rate hikes was always going to dampen total gross lending.
“While we’ve seen an air of stability materialise following a hold on rates, this hasn’t been enough to rejuvenate lending on house purchases and we’re unlikely to see any substantial improvement until such time that the base rate is reduced.
“The good news is that this decision could come within the next few months and, when it does, it will bring a much needed boost to mortgage market sentiment.
“In the meantime, it’s those who already have a mortgage in place who are driving market activity, with the more stable landscape allowing them to better assess their options and remortgage with greater confidence.”
