Remortgage loan size reaches record high
As property prices rise homeowners are able to borrow more when they remortgage without increasing their loan-to-value (LTV).
Figures from the Council of Mortgage Lenders revealed gross remortgage lending increased by 11% to £3.7bn last month and by 5% year-on-year
By volume LMS has estimated the number of remortgage loans rose by 4% to 22,486 in June. But this figure was 12% down on the number of transactions for the same period last year when there were 25,600 remortgage loans recorded.
The remortgage market share now equates to 21% of the total market, a rise from 20% last month but down from 23% in June last year.
Andy Knee, chief executive of LMS, said: “While house purchase loans have bounced back and stabilised as MMR found its feet, remortgaging is still experiencing the brunt of this more acutely.
“We remain fully confident, however, that the second half of this year will see a flurry of activity in the remortgage market with many people already expressing their intentions in anticipation of the inevitable base rate interest rise.”
Knee said buyers are becoming increasingly savvy at sourcing good deals. The LMS remortgage report showed 56% of those remortgaging were able to take advantage of a better rate.
“Affordability is clearly critical for homeowners so it’s great to see remortgage payments as a percentage of income decrease for the first time since January,” he added.