The value of remortgage lending increased by 19 per cent to £4.4 billion in September – the largest monthly total this year, according to the latest figures from Legal Marketing Services (LMS).
The number of remortgage loans rose by 16 per cent in August to 27,734 in September, but down from September 2013 when there were 2,400 remortgage loans recorded.
The average remortgage loan increased by 2 per cent from last month to £158,661, 5 per cent higher than £151,428 in September last year.
The remortgage market share now equates to 25 per cent of the total market, 5 per cent higher than August but down by 29 per cent from the same period last year.
Remortgage repayments account for less than a fifth of total income, the smallest amount in a year as wages rise for the third consecutive month.
Customers are looking to take advantage of competitive remortgage rates on offer as the market recovers from the introduction of the Mortgage Market Review (MMR) and tighter lending criteria.
Andy Knee, chief executive of LMS, said, “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.”
The looming potential of a rise in interest rates has made mortgage payment affordability in changing circumstances a key concern to both borrowers and lenders.
Mr Knee said, “People are therefore advised not to be complacent, but 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.”
Rising house prices have benefited those who already own homes by bringing some out of negative equity and easing restrictions, providing an opportunity for many to remortgage or a better rate.
William Hunter, director at Hunter Wealth Management, said of the factors behind the increase in remortgage lending, “There’s an election on the horizon and interest rates can only go one way. I don’t think the MMR has much to do with it, the general public tend to be unaware.”
