The latest LMS monthly remortgage snapshot reveals that activity in November was fuelled by the inevitable interest rate rise as banks and building societies begin planning increases into products, prompting customers to shop around for the best deals.
The report shows that 47% of borrowers increased their loan size in November and 59% of those who remortgaged took out a 5-year fixed rate product.
The average monthly payment decrease for those who remortgaged was £193.39, with 29% of remortgagers citing lowering their monthly payments as their primary aim for remortgaging.
Nick Chadbourne, CEO, LMS commented:
“Remortgage activity in November was largely fuelled by an expected Bank of England base rate increase, which triggered banks and building societies to begin pricing an expected rate rise into their repayment rates. For borrowers coming to the end of their fixed term, this rise in rates prompted many shop around to secure the best deal possible, rather than opting for a product transfer, as shown by the rise of 11% in instructions month-on-month.
The high activity levels we witnessed in November are set to continue for the foreseeable future, spurred on by the high volume of ERC expiries in December. This should keep the remortgage market buoyant as we head into the new year with a flood of new instructions.”
Panel managers will play a vital role in ensuring that every case is processed efficiently and securely. Using their trusted network of conveyancers, and sophisticated technology, they can provide additional security to ensure clients experience a smooth and streamlined journey, despite the increased market activity over the coming months.”
Buyer demand across the market remains strong as the recently released Halifax House Price Index for December revealed that the average UK house price gained more than £24,500 in 2021, reaching a record high of £276,091. But mortgage approvals have also fallen for the sixth consecutive month and more sellers appear to be coming to market – Rightmove reported a 21% uptick in sellers on Boxing Day 2021, compared with 2020 – suggesting that the market will even out in 2022.
Ross Counsell, chartered surveyor, and director, of regulated property buyers Good Move commented:
“Although as inflation is expected to increase over the next year, as the economy bounces back from pandemic struggles, though house prices should continue to grow this should be at a steadier rate. With mortgage approvals falling for the sixth consecutive month in November 2021 by 0.2%, the supply and demand ratio is predicted to even out. Therefore, there will be much less competition.”
Nathan Emerson, CEO of Propertymark commented:
“These latest figures for December highlight a continued increase in the average house price across the UK. This is unsurprising due to the volume of demand from buyers remaining strong at a time when historically, during winter months, demand tapers down.
Our housing market report for November revealed a 12 per cent increase in the average number of registered buyers, but the lowest number of homes on the market per branch ever recorded. This indicates fierce competition for buyers as there continues to be a huge gap between supply and demand.
We anticipate that our next report will mirror this data and continue the same trend in December, as agents on the ground report an extremely busy month in comparison to previous years.”
