Pick up in house purchase

Buyer instructions and completions have increased, according to conveyancers, although remortgaging levels show no change as yet.

Conveyancing Alliance, the online conveyancing distributor, said its Q2 figures show a 33% increase in instructions from buyers to the end of March this year and a 53% year-on-year increase from Q2 2009.

The number of completions for the second quarter of 2010 have increased 21% on the previous three months, which is a 47% increase on this time last year.

Remortgaging levels have stayed low for 18 months, said the firm, which expects remortgage activity to rise as more borrowers are aware they are on increasingly uncompetitive Standard Variable Rates (SVRs).

Harpal Singh, managing director of Conveyancing Alliance, said:

"The year-on-year increases are notable and show the significant uplift in purchase business that has occurred in the last twelve months. At the end of Q1 this year we noticed a slight increase in remortgage instructions and anticipated that this may well translate into an increase in Q2."

Singh said many borrowers are still happy to sit on their current SVR deal, particularly if their lender is unable to increase their rate by more than 2% over Bank Base Rate (BBR).

"However, there are an increasing number of borrowers who are on SVRs at 4 or 5% above BBR and this is where advisers should be urging borrowers to remortgage.

"It is still our belief that remortgaging activity will rise from this low base over the next six to twelve months, particularly if BBR is increased during that period," he said.