Remortgaging still depressed despite pick-up

Ben Southwood
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REMORTGAGE lending soared between September and October, according to data out yesterday, cementing a solid annual increase.

Gross remortgage lending climbed from £3.3bn in September to £4.1bn in October, LMS estimated this morning, but the improvements could not erase a significant portion of the losses since before the financial crisis, when loans typically totalled around £10bn per month.

This 23.1 per cent monthly rise into October capped off a solid year, during which a 5.7 per cent boost to the average loan size lifted gross lending up 4.2 per cent, despite a 1.4 per cent fall in the number of remortgages.

LMS chief executive Andy Knee said he was pleased with the figures but suggested some of the rise could be down to uncertainty about future market conditions, despite the Funding for Lending Scheme (FLS).

“October showed a consecutive month of growth in the total value and number of remortgages as people took the opportunity to snap up the good deals that are now available – uncertain about just how long they might be around,” Knee said.

Knee, however, expects house prices to rise further as loans increase.

FLS was devised by the Treasury and the Bank of England with the aim of providing as much as £60bn to banks and building societies at cheap rates, as long as the money is actually lent on to customers.