Mortgage activity slowed in August as the market entered its traditional summer lull, but new figures from Twenty7tec show remortgaging is on the rise.

The technology firm reported that overall search volumes fell to 1,558,230 – the lowest since June 2024 – marking a 1% dip compared with last year. First-time buyers were the hardest hit, with searches down 10.51% month on month, suggesting softer demand among those seeking to get onto the property ladder.

In contrast, remortgage activity accelerated. Searches rose 15.61% year on year, extending recent momentum as more households opted to secure a new deal rather than commit to a purchase. Analysts said uncertainty over proposed property tax reforms was weighing on buyer sentiment and prompting many to delay decisions.

While demand eased, lenders moved in the opposite direction. The number of products available climbed to a record 26,933, with more than 900 added in August alone – the largest monthly increase yet – underlining the intensifying competition to win business.

FIXED RATE PREFERENCES

Borrower preferences are also shifting. 10-year fixes now account for just 12.41% of searches, down from 22.62% in August 2024 and from a peak of 36.71% in June 2022. Instead, shorter-term fixes are gaining traction as households prioritise flexibility in an uncertain rate environment.

The buy-to-let sector saw mixed fortunes. Purchase searches from non-first-time buyers fell 12.36% on the month, while remortgage activity slipped 16.55%. Even so, buy-to-let accounted for 17.04% of all searches in August, up from 16.76% in July and 14.67% in April.

Nakita Moss, head of product at Twenty7tec, said: “August often brings a dip in activity, but the year-on-year fall in purchases stands out.

“Borrowers are clearly being pragmatic: remortgaging in greater numbers, leaning towards shorter fixes, and holding back on moving until there is more certainty.

“At the same time, lenders are stepping up competition, with record levels of product choice.

“On the surface, activity looks quieter, but underneath there is still a great deal of movement shaping the market.”