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Remortgage lending is at its lowest percentage since 1999, according to LMS.
Its August figures showed that remortgage lending stagnated at £3.17bn, down 1 per cent on the previous month.
LMS said that gross remortgage lending now represents 25 per cent of total gross mortgage lending, the lowest proportion since 1999, partly because borrowers are holding back on remortgaging, waiting for better deals, LMS said.
However, with a plethora of 3 per cent mortgage deals available, the organisation added that remortgage lending in September should be up.
Chief executive Andy Knee said: “Whilst completion levels last month were disappointing these represent cases that started life some time ago.
“In August we saw a significant uplift in new business and this is now beginning to flow through into completions. Therefore September and October are expected to be much stronger months for remortgage lending. With September new application levels having stabilised at this higher run rate we can expect a strong end to the year for the remortgage market.
“However remortgage lending as a proportion of overall lending may still appear subdued as we are also seeing a significant uplift in house purchase activity driven by the government’s New Buy scheme.
“Many of these customers and the builders they are buying from will be highly motivated to complete their purchase before the end of the year so I am anticipating a strong end to the year for purchase lending too.”
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