MortgagesDec 23 2015

Equity withdrawn through remortgaging hits new record

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Equity withdrawn through remortgaging hits new record

The average amount of equity withdrawn from remortgaging has hit a new record of £36,894 per customer in November, according to LMS.

The outsourced property services provider explained that this represents an increase of 4 per cent from the previous high of £35,590 recorded in August.

In total, that makes it an increase of more than a quarter month on month, from £29,027 in October. It is also a rise of over three quarters since last November, when the average loan amount was just £20,906.

LMS said that in the run up to Christmas, remortgaging can provide a much needed cash injection to households, in this case allowing people to withdraw almost £37,000.

In November, the total amount of equity released by remortgaging reached £1.1bn, 16 per cent higher than the month before and more than double the £500,000 recorded in November 2014.

Additionally, the findings also show that the value of monthly gross remortgage lending fell to £4.6bn in November, down 17 per cent from October’s Council of Mortgage Lenders figure of £5.5bn.

However, this is up by more than a quarter year-on-year, when just £3.6bn of remortgage loans were recorded.

November also saw a 9 per cent fall in the number of remortgage loans taken out by borrowers, decreasing to 29,363 from 32,100 in October. This is, however, up 22 per cent from the 24,000 remortgages recorded in November of last year.

Andy Knee, chief executive of LMS said that after a strong autumn, it is disappointing to see remortgaging activity decline slightly in the run up to Christmas, a time when many could really use the savings gained from switching to a better rate.

“The latter part of 2015 has been much stronger than the start, yet, despite this resurgence, remortgaging still remains a long way off the levels seen prior to the recession,” he said.

“Historically low interest rates and a range of new mortgage products mean the industry can be optimistic for the year ahead. We hope this environment will generate more consistency in lending levels, something 2015 was unable to maintain.”