Recent data indicates an increase in borrower activity
The latest LMS Monthly Remortgage Snapshot for July has revealed a surge in remortgaging activity across the UK, reflecting heightened borrower interest amid a shifting mortgage landscape.
The report from LMS, a leading provider of conveyancing services, has highlighted a 26% increase in remortgage instructions and a 20% rise in completed remortgages compared to the previous month. However, the cancellation rate also climbed by 26%, indicating a more volatile market. Meanwhile, the pipeline of remortgage cases decreased by 3%.
LMS also found notable shifts in borrower behaviour. Approximately 45% of those who remortgaged increased their loan size, with the average increase amounting to £20,243. On the other hand, 19% reduced their loan size, with an average decrease of £15,561.
Remortgaging led to a significant change in monthly payments, with 68% of borrowers experiencing an increase. The average monthly payment for those who remortgaged rose by £367.03, while 21% of borrowers managed to reduce their monthly payments, averaging a decrease of £304.20.
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The average remortgage loan amount stood at £208,588 across the UK, with London leading the pack at £368,047, more than double the national average. The longest previous mortgage lengths were found in Wales, averaging 72.69 months, while the shortest was in the South East at 65.02 months.
Market outlook
LMS anticipates further activity in the coming months, driven by expectations of future rate changes and the appeal of fixed-rate products. A substantial 44% of remortgagers opted for a five-year fixed-rate product in July, indicating a desire for payment stability amid economic uncertainties. Additionally, 74% of those choosing fixed-rate products cited the need for predictable monthly payments as their primary motivation.
Reflecting on these trends, LMS CEO Nick Chadbourne (pictured) commented, “I feel we are on the cusp of some meaningful activity. We expect a 15 to 20 per cent increase in product changes next year, and with the automation and improvements in remortgage conveyancing, we may see a move away from product transfers and a shift to full remortgage switching.”
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