Remortgage instruction volumes in the UK increased by 11% during October, according to new data from LMS.
The conveyancing solutions provider also revealed that remortgage completion levels increased by 4%, owing to a slight increase in ERCs at this time of year, while the cancellation rate increased slightly, with a rise of 0.83% to 7.89% of cases in October.
Rising completions and a steady cancellation rate caused the remortgage pipeline to decrease by 13%, LMS confirmed.
October also saw the average monthly payment decrease by £200.76 for those who remortgaged during the month. Forty-three per cent of borrowers increased their loan size in October, while 49% of those who remortgaged took out a 5-year fixed rate product. The primary aim for 27% of those who remortgaged was to release equity from their property, the analysis also found.
LMS CEO, Nick Chadbourne, said: “More pressure is being placed on the government to extend the stamp duty holiday and if this is successful, the timing of the announcement will be key. Too early and there will be an increased strain on the pipeline with more people looking to move and take advantage, but too late and we won’t feel the benefits.
“Instructions grew for the first time since June, triggered by an increased number of ERC expiries together with a greater ability for brokers to deal with both home-moving and remortgaging cases.
“That said, we should be seeing far higher volumes at this point in the year, but many borrowers are being forced to turn to product transfers either due to wanting certainty over service delivery, being unable to find a free broker, or because their circumstances have changed and securing a deal with their current lender is easier.
“We know that ERCs in 2021 will follow a similar pattern to 2020 so the remortgage market will come back as we move into next year. The chancellor has doubled down on his furlough scheme, and if this works and protects jobs as intended, the 2021 remortgage market may well be business as usual after Q1.”
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