However, the pipeline contracted
Remortgage instructions increased by 9% in February, but pipeline cases decreased by 2% month-on-month, resulting to 31% less remortgages completed in February.
The latest Monthly Remortgage Snapshot from conveyancing panel management services LMS also found that overall cancellation rate increased by 0.35%.
For those who remortgaged in February, the average monthly payment increased by £257, while 70% of borrowers increased their loan size.
Over half, or 54%, of those who remortgaged, took out a five-year fixed rate product, the most popular product last month. About a third or 30% said their main aim when remortgaging was to gain longer term security.
“Instructions continued to rise in February as expected, as people looked to lock in rates before they rise again,” said Nick Chadbourne (pictured), chief executive at LMS.
“This is to be expected since we have seen swap rates bottom out, and the majority of borrowers continued to go after five-year fixed rates in a push for longer term security.
“Despite this, the pipeline contracted as a result of a simultaneous increase in cancellation rates. This was predictable, though, as people who secured rates in December started cancelling and reapplying for more attractive rates.”
He added: “We are likely to see an uplift in instructions, thanks to the ERC spike expected at the end of the quarter. This will be tempered a little as affordability remains a challenge, and with the Spring Budget doing nothing to help the housing market, this will be unlikely to go away anytime soon.”
Chadbourne stressed that what we needed was measures to help people get on the property ladder, with the government taking steps to increase housing stock, improving affordability, and making the long-term rental market more stable by easing punitive measures on landlords.
“But we didn’t see any of that,” he said. “Hopefully, there will be more input in the coming months, but until then we are likely seeing reduced activity overall as people effectively wait and see before making any decisions.”
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