Regional trends
The average remortgage loan amount in London was £349,675, while the average for the rest of the UK stood at £173,597 making remortgage loan amounts 101% higher in London than in the rest of the country.
The longest previous mortgage length was found in the North West at 70.54 months (5.88 years), while the shortest was in East Anglia at 59.12 months (4.93 years), making the longest previous mortgage term 19.31% longer than the shortest.
Average remortgage amount: £206,156
Average length of previous mortgages (months): 64.06
Average length of previous mortgage
Borrowers’ behaviours potentially shifting, but affordability and rates remain key factors.
The key mortgage figures from UK Finance in 2023 showed an increase in product transfers of 17.1% compared to those in 2022 – it is clear that the PT trend has continued into 2024.
Whilst not as significant as April, we are heading towards another ERC spike at the end of July. Typically, this would mean an increase in remortgage instructions a few months prior; however, as is shown, we have experienced an atypical decrease in remortgage instructions month on month.
In other news, for the first time since November 2023, a 5-year fixed product has become the most popular choice amongst customers. Our data also shows that 73% of customers’ product choices are motivated by security and wanting to know how much to pay per month. Both metrics indicate that a critical driver for borrowers is wanting certainty of mortgage payments over the longer term; although the Bank of England suggests rates will reduce, borrowers are opting for potentially higher payments over a longer term to ensure they have that certainty.
Affordability and rates remain key factors, but are we now looking at a shift in borrower behaviour? Are borrowers deciding to tie themselves to the same lender for multiple product periods? The data certainly suggests so.
Borrower expectations for interest rate increases:
36% within the next year
15% more than a year away
49% no expectation for a rate increase
Product Purchasing
43% 2-year fixed
44% 5-year fixed
1% 10-year fixed
3% Tracker
Fixed-rate purchase motivations
73% I wanted the security of knowing how much I’ll be paying each month
9% my broker recommended this
2% my lender recommended this
Primary goal when remortgaging
28% lower monthly payments
25% release equity on property/borrow more money
19% security over monthly payments/lock in a good deal now
Methodology
LMS’ UK remortgage lending estimates are forecasts based on our up-to-date internal conveyancing data covering thousands of remortgage completion transactions.
Established for over 30 years, LMS is one of the UK’s leading providers of conveyancing services. We offer a range of solutions for the entire conveyancing market, enabling a slick, secure, and seamless journey for all parties.
This article was published by LMS as part of their advertising agreement with Today’s Conveyancer.
The views expressed in this article are those of the submitter and not those of Today’s Conveyancer.
