While remortgage lending fell by 11.7 per cent from May to June, the average sum borrowed has reached record levels, at £149,514, with a fifth releasing the equity to fund home improvements.
Figures from LMS Property Services reveal that monthly gross remortgage lending decreased by £462 million in June to £3.5 billion, down from £3.9 billion in May, as recently reported by the Council of Mortgage Lenders.
The Council of Mortgage Lenders has also reported that total gross mortgage lending rose 2.0 per cent in June to £15.0bn, from £14.7bn in May. As a result, remortgages now represent 23 per cent of the market.
LMS estimates that the total number of remortgage loans in June decreased by 13.9 per cent to 23,316 compared with 27,087 in May. This figure is also down 2.1 per cent on this time last year.
The average remortgage loan amount has risen by 2.6 per cent over the past month and now stands at £149,514. This is the highest figure LMS has on record.
Commenting on the latest figures, Andy Knee, Chief Executive of LMS says: “Both the value of remortgage lending and the number of remortgagers fell for the first time since the beginning of the year in June. In contrast, gross mortgage lending continued to rise and as a result, remortgaging accounted for under a quarter (23 per cent) of all transactions.
“However, remortgage customers were taking out a record amount of equity – the highest amount since January 2012. A fifth (20 per cent) said they did so to fund home improvements, whilst a further 9 per cent used the additional funds to pay off debts.
“With Mark Carney confirming that interest rates will not be rising for the time being, others who are considering remortgaging would do well to take advantage of the current deals, as there will be an avalanche of remortgage activity once interest rates do eventually increase.”
Loading ...