Conveyancing services provider LMS has released their monthly snapshot of remortages across the UK, showing that there was an average increase in monthly payments for those who remortgaged in May of £342.03 and 45% of borrowers increased their loam size in May. There was an average monthly repayment decrease of £339.44.
LMS’s latest figures also show that 48% of those who remortgaged took out a 2-year fixed rate product, which was the most popular product last month. a further 26% said their main aim when remortgaging was to lower their monthly payments, making it the most popular response in the survey. Nine per cent more remortgages were completed in the month of May and there was a cancellation rate of three per cent – meaning the overall cancellation rate had decreased from the previous month by three per cent. Pipeline cases decreased by 11% month-on-month.
The new snapshot shows that 34% saw no change in their total loan size and that 21% reduced their total loan size, making the average loan increase post remortgage- £20,869 and the average loan decrease post remortgage- £12,727.
Changes in monthly loan repayments reported by borrowers has shown that 70% increased their monthly remortgage repayments, 9% saw no change in their monthly remortgage repayments and 21% reduced their monthly remortgage payments.
The average remortgage loan amount in London was £375,612, while the average for the rest of the UK stood at £171,223 making remortgage loan amounts 119% higher in London than in the rest of the country. The longest previous mortgage length was found in London at 72.20 months (6.02 years), while the shortest was in the North East at 57.89 months (4.82 years), making the longest previous mortgage term 24.7% longer than the shortest.
LMS has said that the median remortgage amount stood at £204,638 for May, whilst the average length of previous mortgages was 63.60 months.
LMS CEO Nick Chadbourne commented, saying: “The sun is shining and ERCs are low, indicating a quiet few months in the remortgage world. The remortgage market follows the usual patterns, just like Gareth Southgate’s strategies at a major tournament. There is still a high level of product transfers as lenders aim to increase retention in a low-margin environment, and the summer has a drop in product maturities, which means the remortgage market will be very low until schools reopen.
“The Prime Minister surprised us all with the decision to have an election in July, while the Bank of England kept rates the same at the beginning of June, citing one metric as the reason, but I think we all know it’s because of the election. So, the sun is shining, the football is on, kids are about to finish school, and ERCs are low – all signs indicate a quiet few months in the remortgage world.”
LMs predicts from their findings that borrower expectations for interest rate increases will be 42% within the next year, 14% more than a year away and a 44% chance of no expectation for a rate increase.
Product Purchasing shows that 48% of homebuyers go for a 2-year fixed term, 40% 5-year fixed and 1% 10-year fixed.
LMS found that of those surveyed 71% say ‘I wanted the security of knowing how much I’ll be paying each month’, while 16% admit ‘I am worried about the economic climate and wanted to lock in a fixed rate’ – 11% claim ‘my broker recommended this’
Primary goals when remortgaging were shown in other findings with 26% wanting lower monthly payments, 24% want release equity on property or to borrow more money and that 20% value security over monthly payments and want lock in a good deal now.
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.
