Mark Sismey-Durrant, chief executive of Heritable Bank, said it was becoming an issue for lenders looking to control business levels.
He explained: “Before, you would write new business and this would keep the number of borrowers you have stable as they replace the ones which leave. But our redemption levels have dropped so the back book stays the same and you have to be careful about how much new business you write.”
John Heron, managing director of Paragon Group, said he had not yet encountered the trend.
“Since we began lending, our experience of redemption rates has been remarkably stable at around half of that in the residential sector. You’ll always get monthly fluctuations but we’ve not see much diversion from the norm.
“However, we’ve seen some significant changes in the criteria offered by lenders and this will restrict refinancing options and therefore impact on redemption figures. But I don’t think this will be a long-term trend.”
