The value of monthly gross remortgaging has hit a six-year high, according to the latest figures from outsourcing property services provider LMS .
Total remortgaging value in April 2015 stood at £4.8 billion, the largest monthly amount recorded since July 2009. The increase compared to April last year is 15 per cent.
The number of remortgage loans also reached a record, climbing by a fifth (21 per cent) to 32,230 in April and reaching the highest level since September 2013. Compared to a year ago, the rise in the number of loans was also 15 per cent.
The total amount of equity withdrawn from remortgaging in April stood at £792 million, up by 37 per cent on March and by 80 per cent on April last year. It is the largest amount on record since July 2008.
The average amount of equity withdrawn from remortgaging per customer rose to £24,565 in April, a 13 per cent rise from March. This is also 57 per cent higher than April 2014 when the average amount was £15,696. Despite the substantial increase in the amount withdrawn, rising house prices mean the loan size has not increased and the average loan-to-value (LTV) amount actually fell by 4 per cent.
Commenting on the latest figures, Andy Knee, chief executive of LMS said:
“While we have a positive outlook for the year ahead, we do not anticipate a surge of activity but instead a steady stream of customers to keep lenders busy.
“The certainty that a clear election result brought saw the housing market breath a huge sigh of relief. But to maintain momentum we should not become complacent and should continue encouraging brokers and customers to discuss the potential benefits of remortgaging – especially at a time when there are so many competitive offers around.
“The current deflationary economic climate and rising incomes mean household finances are under slightly less pressure than previously. Nonetheless potential customers will appreciate that – thanks to house price rises – they are often able to withdraw equity from their homes without increasing the size of their mortgage, something many customers are concerned about.”
