March saw a 17.2% increase in instruction volumes across the remortgage market, the latest LMS Monthly Remortgage Snapshot has revealed.

The data showed that there were 4.7% more remortgages completed in March than in February.

While the overall cancellation rate climbed by 0.5% to 7.45% across the remortgage space, LMS also reported that healthy instructions contributed to a strong pipeline, which increased by 12.8% through March.

The figures mean the average monthly payment decreased by £238 for those who remortgaged in March, while 54% of those who remortgaged took out a five-year fixed rate product, the most popular product of the month.

LMS CEO, Nick Chadbourne, suggested that remortgage instructions had grown as the Stamp Duty Land Tax (SDLT) holiday extension increased industry capacity by “taking pressure off the purchase market”.

“March also brought the market right up to the five-year anniversary of 2016’s stamp duty cut for buy-to-let purchasers, which will have contributed to the increase as many landlords begun the remortgage process as their five-year fixes came to an end,” Chadbourne highlighted. “These factors are the most likely cause for the pipeline growth as cancellations remained fairly steady.”

The LMS CEO also stated that the purchase market is “likely to retain the lion’s share of mortgage business” through the second quarter, with government support such as the 95% government-backed LTV scheme and SDLT holiday continuing to prop up the market.

However, Chadbourne warned this balance should shift as the incentives offered by the stamp duty holiday reduce at the end of June.

He added: “Remortgage-focused businesses should prepare for a growth in enquiries but shouldn’t abandon the other business streams which many have explored while purchases were on top – growth at any time should be seized with both hands, but those who are still reliant on old processes will struggle.”

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