Remortgage instruction volumes around the UK fell by 24% between June and July, according to new data published by Legal Marketing Services (LMS).

The conveyancing solutions provider’s latest Monthly Remortgage Snapshot showed that the number of cancellations surged by 78% during July, however, as borrowers looked for security.

The research, based on internal LMS conveyancing data that covers thousands of conveyancing transactions, also revealed that the cancellation rate for remortgages was 6.93%, a rise of 1.29% during July. Pipeline figures dropped by 14% between the end of June and the end of July.

Thirty-nine per cent of borrowers increased their loan size, while 31% of borrowers remortgaged to lower their monthly payments during July. Another 47% of people who remortgaged took out a five-year fixed rate product, which LMS indicated was the most popular product during the month.

The figures also showed that the average monthly payment decrease for those who remortgaged was £200.76.

“July’s data illustrates that the landscape has changed and the remortgage market continues to evolve,” commented LMS CEO, Nick Chadbourne. “Consumer behaviours have inevitably altered in response to the pandemic, with one in six borrowers reportedly taking a mortgage payment holiday.

“However, completion volumes nearly doubled from June to July, as many people look for security and certainty in their personal finances. This, combined with higher rates of conversion and decreasing instruction volumes, has resulted in a reduced pipeline heading into August.

“Five-year fixes are rising again following the initial drop we saw in April, which isn’t surprising as borrowers look to lock in longer term deals with interest rates at all-time lows.

“Nearly three-quarters of borrowers reported their motivations for remortgaging coming from a need for monthly payment security, which is a strong indicator of borrower behaviour. With the full effects of COVID-19 on the housing market unknown, we expect this trend to continue as borrowers look for certainty in their monthly outgoings.”

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