The LMS data revealed that the value of gross remortgage lending is also more than a quarter (26%) higher than February 2015’s figure of £3.5bn.
The number of loans also decreased – by 16% – from 33,100 in January to 27,840 in February. This is still 23% higher than February 2015 when 22,700 borrowers remortgaged.
Per customer, the average amount of equity withdrawn from remortgaging rose by 11% from £25,955 in January to £28,685 in February. This is the largest amount recorded in the month of February as borrowers continue to take advantage of rising house prices and competitive rates. The average amount of equity withdrawn is also 7% higher than February of last year (£26,682).
The total amount of equity withdrawn fell by 7% month-on-month from £859.1m in January to £798.6m in February. Total equity withdrawn is however, almost a third (31%) higher than the £609.8m recorded in February 2015.
Andy Knee, Chief Executive of LMS, responded to the figures: “Despite a drop in activity from January – a trend we’ve experienced each year since 2010 – remortgage lending in February remains buoyant. The value of loans were the largest amount recorded in the month of February for seven years, demonstrating maintained momentum for remortgaging as we return to a healthy, post-recession market.
New rock-bottom rates should encourage even the most hesitant of homeowners to consider the benefit of remortgaging, since huge savings can be made.
However, there’s a push and pull occurring in the remortgage market at the moment. On one hand we have enticing, rock-bottom rates, and on the other, a looming uncertainty compounded by the possibility of a Brexit and the shaky global economy. On the whole, the industry is in agreement that the housing market is unlikely to be unduly affected in the lead up to the EU referendum, although there might be a slight slowdown in house price growth. This means we expect remortgaging growth to continue but we shouldn’t expect a drastic change in activity until after June 2016.”
