MortgagesMay 26 2016

Remortgaging hits seven-year high in April

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Remortgaging hits seven-year high in April

Gross remortgage lending rose to £6.4bn in April, the largest amount since the £7bn recorded more than seven years ago in November 2008.

Research from outsourced property services provider Legal Marketing Services explained this represents a 36 per cent increase from the £4.7bn recorded in March and a 48 per cent uplift from the £4.3bn recorded last April.

The number of remortgage loans also increased, by 41 per cent, from 28,000 in March to 39,353 in April.

This is also 47 per cent more than last April, when 26,700 borrowers remortgaged and the greatest number since July 2009, when 39,500 remortgaged.

LMS stated the low interest rate has resulted in mortgage affordability improving sharply.

Now remortgage payments as a percentage of income are at 16.79 per cent, a record low, down from 18.4 per cent the previous month.

20162015
April 2016March 2016% change April 2015

% annual change to present

Gross remortgage lending (£m)

6,3694,70036%4,30048%

Number of remortgages

39,35328,000 41%26,70047%

Average loan amount

161,849153,9165%149,8818%

Andy Knee, chief executive of LMS, said the average amount people are withdrawing through remortgaging fell to a 13-month low, suggesting household budgets are not as constrained as previously.

He said: “Homeowners can also celebrate that - as a result of such low mortgage rates and rising incomes - repayments as a percentage of income have fallen to a record low, boosting family finances.

“However, the subject of Brexit will continue to dominate headlines until the 23 June, which could have an impact on the mortgage rates that banks offer as well as household finances,” he added, noting that fixing now means borrowers can rest assured of a competitive rate and make substantial savings on monthly outgoings.

peter.walker@ft.com