Borrowers remortgaging in August released an average of £20,219 per household in equity – up 9 per cent in a month, according to LMS.
Equity withdrawn totalled over £500 million, 10 per cent more than in August 2013 – likely a reflecting of increasing house values.
Annual remortgage payments as a percentage of income were also at their lowest since the start of the year, as wages improved for the second consecutive month.
LMS chief executive Andy Knee (below) expects remortgage activity to pick up before the end of the year, as lenders come to grips with new affordability rules and borrowers rush to pick up good fixed-term interest rates.
“House price increases have also put people in a better position to remortgage, raising the amount of equity they have – and in some cases taking people out of negative equity caused by the crash – allowing them to withdraw more equity through remortgaging without increasing the size of their LTV [loan-to-value ratio].
“Rising incomes, recorded by CML for the second month in a row, coupled with the entrance of more competitive remortgage rates mean that repayment as a percentage of income is now at its lowest amount since the start of the year – great news for customers considering remortgaging.
“Even with an interest rate rise anticipated for the Spring of next year, [Bank of England governor Mark Carney]’s insistence that it will be slow and gradual means that competitive rates will persist, and customers will keep their affordability intact – something critical to all those that have found their purse-strings stretched over the past few years.”
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