The decline represents an 11.3% drop on January’s £2.9bn reported by the Council for Mortgage Lenders last week.
LMS estimates that the total number of remortgage loans in February decreased by 12.4% to 17,812, compared with 20,332 in January.
The CML also reported that total gross mortgage lending fell 8% in February to £10.5bn, from £11.4bn in January. As a result remortgages have broadly maintained their share of the mortgage market (24%).
Although gross remortgage lending fell 11.3% in February it is down only 1.8% on February 2012, painting a less volatile picture of the remortgage market over the long term.
Andy Knee, chief executive of LMS, said: “February’s monthly 11.3% dip in remortgage lending can at least partly be attributed to a lull in remortgage applications over the Christmas and New Year period.
“However, the fact that it was still annually down by 1.8% suggests that the FLS still needs more time to bed in and we would urge the Government to continue with the scheme in its current form. This is hopefully now looking more likely in light of the Chancellor’s Budget statement.
“An extension of the FLS, together with continuing falls in mortgage rates for both new and existing borrowers, suggests that all types of mortgage lending should grow strongly over the coming months.”
The average remortgage loan amount however has risen consistently since May 2012 and now stands at £143,333. This is 6.6% higher than the time last year.
