The number of remortgage loans rose 23 per cent year-on-year in February, although this was a 16 per cent fall from January, according to new research from LMS. The value of gross remortgage lending is also more than a quarter (26 per cent) higher than February 2015’s figure of £3.5bn.
The total amount of equity withdrawn this year fell by seven per cent month-on-month from £859.1m in January to £798.6m in February. However, this figure was almost a third (31 per cent) higher than the £609.8m recorded in February 2015.
"Despite a drop in activity from January – a trend we’ve experienced each year since 2010 – remortgage lending in February remains buoyant. The value of loans were the largest amount recorded in the month of February for seven years, demonstrating maintained momentum for remortgaging as we return to a healthy, post-recession market," Andy Knee, chief executive of LMS, said.
"On the whole, the industry is in agreement that the housing market is unlikely to be unduly affected in the lead up to the EU referendum, although there might be a slight slowdown in house price growth. This means we expect remortgaging growth to continue but we shouldn’t expect a drastic change in activity until after June 2016.”
The number of loans also decreased – by 16 per cent – from 33,100 in January to 27,840 in February, which remains 23 per cent higher than February 2015 when 22,700 borrowers remortgaged.
Per customer, the average amount of equity withdrawn from remortgaging rose by 11 per cent from £25,955 in January to £28,685 in February. This is the largest amount recorded in the month of February as borrowers continue to take advantage of rising house prices and competitive rates.
"New rock-bottom rates should encourage even the most hesitant of homeowners to consider the benefit of remortgaging, since huge savings can be made. However, there’s a push and pull occurring in the remortgage market at the moment. On one hand we have enticing, rock-bottom rates, and on the other, a looming uncertainty compounded by the possibility of a Brexit and the shaky global economy," Knee added.