Remortgage lending hit its highest level for almost eight years, as a surge of homeowners looked to capitalise on the low interest rates following the EU referendum.
Fresh figures from LMS revealed remortgaging reached £7.1bn in July, up by more than a quarter from £5.6bn reported in the previous month, and the largest amount since October 2008.
The number of remortgage loans also topped 40,000 in a single month for first time since January 2009, while the average remortgage terms dropped to the lowest level since October 2009, falling to 4 years, 3 months.
These findings come as data from the Bank of England revealed mortgage approvals had fallen to an 18-month low, while remortgaging had increased.
Andy Knee, chief executive of LMS, said there has been a rush of homeowners looking to lock-in lower mortgage rates.
He also said rising house prices, declining swap rates, and speculation about an imminent base rate change at the Bank of England have contributed to a favourable outlook for the remortgage market.
“The aftermath of the UK’s vote to leave the EU has not overshadowed an environment that is ripe for remortgaging as product rates plummeted to new lows,” Mr Knee said, pointing to Bank of England figures showing 75 per cent of LTV products with a two year fix fell to 1.72 per cent.
The LMS boss said homeowners have been quick to capitalise on this, adding there is “little sign” that incentives to remortgage will disappear any time soon.
Data also shows the average remortgage loan size increased to £172,184 in July, up 9 per cent from £157,557 in June, while the the average loan-to-value also increased from 54 per cent in June to 58 per cent in July.
The surge in remortgaging meant the total amount of housing equity withdrawn via this route in July rose by more than a quarter, to £1.2bn from £952m, which LMS pointed out is the greatest amount withdrawn since April 2008 when it reached £1.4bn.
Mr Knee added: “Although there is little for homeowners to fear in terms of a base rate rise over coming months, many could seek stability by remortgaging and fixing now, and we expect activity to maintain its momentum through the rest of 2016.”