The value of remortgage loans taken out in March 2015 dropped to the lowest level in two years while the number of transactions increased, according to the latest data from outsourced property services provider LMS.
The total amount of remortgage lending for March 2015 summed up to £3.3 billion, the lowest recorded since March 2013.
The average size of a remortgage loan stood at £147,484 in March, down 6 per cent on the year and to the lowest amount on record since July 2013.
Despite the low mortgage rate offers currently on the market borrowers preferred longer term products and the average period for remortgage loans rose to five years, which is 11 per cent longer than the remortgage terms on loans extended a year ago.
The amount of equity withdrawn through remortgaging in March (£21,755) was 19 per cent lower than in the previous month but compared to March 2014 it was 31 per cent higher. This is a sign that people still struggle to maintain a balanced budget month-on-month.
Commenting on the latest figures, Andy Knee, chief executive of LMS, said:
“Despite a recent boost to mortgage lending as we head into summer, remortgage figures remain lower than last year, prolonged by the uncertainty of a looming election. At a time when interest rates and offers are at a record low, it is surprising to see that borrowers are remortgaging less often and are failing to capitalise on these offers.
“People are averaging higher incomes than this time last year, but affordability still remains an issue.
“With the election round the corner, housing is high up the political agenda and a possible point of settlement for a coalition. While government intervention and policy is welcome to encourage stability, an artificial prop for the housing market is not a permanent solution. This is something parties should bear in mind: supply remains the major chink in the housing market armour and urgently needs addressing before a sustainable market can flourish.”
