Seasonal fall in lending won’t dampen demand: LMS

The chief executive of LMS made the comments as the firm’s latest monthly gross remortgage lending fell by £949m in November to £3.1bn, representing a 23.4 per cent decrease.

The fall in gross remortgage lending over the month means remortgaging now accounts for less than a quarter of the gross mortgage lending. Overall, the total market was unchanged in November, with £12.9bn total lending.

Although the figure has fallen, November’s remortgage lending figure is £114m more than in August 2012, when gross remortgaging lending fell to its lowest level for 12 years. This stagnation can be attributed to a seasonal lull in homeowner activity.

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Mr Knee said: “This can be attributed to a seasonal lull in activity in Autumn as homeowners opted to delay any financial decision making until the New Year. This is also reflected in the gross mortgage lending estimate from the Council of Mortgage Lenders, which has reported that growth stalled following a similar burst of activity the previous month.”

The average remortgage loan amount increased moderately in November, 5.5 per cent higher than this time last year, and a peak since December 2008.

Mr Knee added: “Despite a weaker than expected November for the remortgage market, we are still on course to reach our predicted 310,000 transactions for 2012 with the FLS, general easing of funding constraints and competitive deals with finer margins contributing to growth of as much as 25 per cent this year (2013).”