Home buyers walked away from more than £32 billion of agreed mortgage lending last year as delays and failed transactions continued to weigh on the housing market.

The value of abandoned mortgages rose by more than a third in 2025, with £32.4 billion of lending cancelled as property sales increasingly failed to reach completion.

Mortgage cancellations climbed 36.4% over the year, the sharpest annual increase in four years. Lenders recorded 134,057 cancelled mortgages in 2025, up 26.4% on the previous 12 months, according to analysis of Bank of England data.

The findings were identified by Novus Strategy, the transformation consultancy focused on the home buying and selling industry, which examined the latest figures for Monetary Financial Institutions released at the end of last week.

Cancellations represent a significant cost for lenders, not only because of the application, valuation and underwriting work already undertaken, but also due to the impact of extended pipelines on capital usage and liquidity.

Mortgages may be withdrawn for a number of reasons, including borrowers making multiple applications for the same property or changing their plans altogether. However, a substantial proportion of cancellations are linked to transactions falling through because of the length of time taken to move from offer to completion.

Longer transaction times increase the likelihood that career changes, personal circumstances, or shifts in credit and financial positions derail a purchase. When combined with the disruption caused to estate agents and mortgage brokers, the cumulative cost to UK businesses is estimated to run into billions of pounds each year.

Data from TwentyCi show that property fall-throughs continued to rise last year, with 303,538 failed transactions recorded in 2025, an increase of 4.5% compared with the previous year. This came despite only modest growth in new instructions and agreed sales, which rose by 2.3% and 2.1% respectively.

The increase in cancellations occurred alongside a rise in mortgage approvals for house purchases. Approvals increased 5.1% to 876,458 in 2025, with a combined value of £216.8 billion, up 11.1% year on year. On that basis, cancellations equated to around 14.9% of approved lending by value, although approvals and cancellations do not align precisely due to timing differences.

In recent years, lenders have focused on reducing the time taken to issue mortgage offers. While this has delivered some efficiencies, it has had limited impact on overall transaction speeds. Attention is now shifting towards reducing the time to completion as the next priority for reform.

Industry participants, technology providers and public bodies are increasingly focused on accelerating the home buying process. Work is underway involving the Ministry of Housing, Communities & Local Government, HM Land Registry and industry organisations including the Open Property Data Association, aimed at improving data standards, enabling upfront property information and supporting reusable permissions and electronic signatures.

These initiatives form part of a broader approach known as Horizontal Digital Integration, which is intended to improve interoperability across the home buying and selling process and reduce avoidable delays.

Claire Van der Zant, chief executive of Novus Strategy, said: “Avoidable fall-throughs cost the property industry as a whole billions of pounds a year and lenders will want to see these numbers coming down.

“While the myriad reasons that property transactions fall through may sound uncontrollable, the most powerful thing we can do to mitigate this is increase the speed at which transactions can complete. Everyone in the industry is acutely aware of this and it relies on moving out of the first phase of transformation, where business focused on internal digitalisation, to the second phase where we horizontally integrate for interoperability.

“This second phase is already happening through the work of MHCLG, DPMSG, OPDA and CFIT. Together, the industry is rewriting the fabric of the home buying industry using data standards, trust frameworks and smart data pilots. The acid test will be that transaction times become a customer choice, not an excruciating six months of uncertainty.”