Monthly gross remortgage lending was up 19 per cent in September to £4.4bn from the previous month, marking the largest value of remortgage lending seen in 12 months, data from property outsourcer LMS revealed.
LMS said that customers are capitalising on the “competitive deals currently on offer”.
The outsourced property services provider also estimated that the number of remortgage loans rose by 16 per cent to 27,734 in September, although this represents a 14 per cent fall from this time last year, when there were 32,400 remortgage loans were recorded.
The remortgage market share now equates to 25 per cent of the total market, 5 per cent higher than last month but down from 29 per cent in September last year.
Andy Knee, chief executive of LMS, said: “Tighter lending criteria and the introduction of MMR took their toll in the earlier part of the year, but the market has recovered well to record the largest lending value seen in the last 12 months.
“There are some excellent offers for customers willing to shop around, and the opportunities for remortgaging in particular are boundless – with the biggest difference in rates between remortgaging and new purchase mortgages that we’ve seen for two years – offering homeowners some welcome relief.”
Mr Knee advised consumers to examine their options now as uncertainty ahead of the election next year, the prospect of an interest rate rise and changing economic conditions may introduce a note of caution to the market, curtailing lender appetites.
Based on data from the Council of Mortgage Lenders, LMS calculations show that annual remortgage repayments account for 19.7 per cent of household income, the lowest amount since July 2013.
This remains substantially lower than the typical rate for a new purchase mortgage, which has a rate of currently 22.1 per cent, while the difference between purchase mortgage and remortgage annual repayment as a percentage of income is the largest it has been for two years (2.50 per cent in August 2012).
peter.walker@ft.com
