Remortgage completions dropped in the second half of March, in part reflective of the usual trend of numbers trailing off from the start to the end of the month, but initial signs from the first April data are “very positive”, according to LMS.

Volumes were 30% up month-on-month in March and ahead of the 2019 activity recorded by LMS, which said the trend was largely down to a peak in ERC expiries – with 11% of all ERCs for 2020 coming in April.

The conveyancing solutions provider suggested that with the UK’s purchase market largely on hold, the industry would be looking to the remortgage sector to understand the overall impact of the Covid-19 crisis on transactional volumes.

Seasonally, LMS indicated the months of March and April are historically the busiest in the year, with a significant percentage of ERCs completing throughout this period. However, despite a reduction in interest rates, the conveyancing solutions provider said the Covid-19 crisis had given rise to a number of challenges – with tighter lending criteria, consumer income reduction and unemployment, as well as the loss of all physical contact making an impact.

Looking ahead, LMS added that there appeared to be “some slowing of pipeline activity” due to processing challenges, such as access to redemptions statements, and the extension of funds request timelines by lenders to allow everyone to manage capacity.

LMS CEO, Nick Chadbourne, commented: “Despite the stepped drop in the middle of March, we are seeing healthy volumes entering the pipeline and existing remortgage business is continuing to be processed as usual. We can also cautiously predict a strong April, thanks to a peak in ERC expiries and a strong pipeline compared with the previous month.
 
“March 16 was a critical moment for lenders, with many removing +80% LTV products and limiting the progression of complex cases, delivering the drop in instructions we witnessed.
 
“The remortgage sector remains fully open for business, and as it refines processes and adapts to this new situation, capacity will only increase. We’re in uncharted waters to some extent, but knowing how the market is performing in real time could make a big difference for firms attempting to navigate their way through the crisis. As such, we’ll be sharing information on as many useful data points as we can.”

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