Remortgage instruction volumes back to pre-lockdown level

Remortgage instruction volumes returned to their level before lockdown thanks to a growth of 39.7% between the second and third weeks of May, new data from Legal Marketing Services (LMS) has revealed.

The conveyancing solutions provider suggested the third week of May had the highest volumes of instructions it had seen since the week commencing 9 March, before lockdown measures were announced anywhere in Europe.

Publishing its latest weekly update on the remortgage market performance through the COVID-19 crisis, LMS also compared the third week of May to the third week of April and found there was a 35% increase in volumes – although noted this was likely due to the Easter bank holiday Monday in April.

The data showed that overall completion volumes are running at similar levels to May 2019, with volumes only 3.7% lower than the average at this time in the month last year. 
 
LMS CEO, Nick Chadbourne, commented: “Remortgage instructions have spiked since the reopening of the housing market on 13 May, as borrowers take the opportunity to capitalise on the increased number of products available on the market and make financially savvy decisions to ensure they have the best products for them.
 
“Restored market confidence and the consequential increase in instructions will continue as additional higher LTV products are brought back to the market and borrowers are able to alter loan amounts or change lender.”
  
LMS also indicated the increased volume of instructions, paired with steady completion rates, had offset the rise in remortgage cancellations – meaning the pipeline increased by 1.9% in the third week of May. Overall, conveyancing solutions provider said this means total pipeline volumes are up 31.8% when compared to May 2019.

Cancellation numbers, however, continued to rise for a second week, and stood at 29.6% higher for the week commencing 11 May compared to the previous week. LMS suggested the overall cancellation rate in May currently stands at 6.74%, the highest percentage since January – but highlighted there was still one final week to collect data for before it could produce a total monthly average.

“Despite the surge in instructions, the near equivalent rise in cancellations paired with flat levels of completions has meant only a slight expansion of the pipeline,” Chadbourne added.

“The industry must continue to work together as demand will likely continue to increase in the coming weeks. Fee Assisted Remortgaging (FAR) remains by a distance the quickest and easiest way to remortgage.

“The continued investment from LMS and its firms in FAR over the years has assisted in ensuring it has retained its efficiency and accuracy throughout the crisis. FAR’s success through the current market is a testament to the importance of technological investment, innovation and implementation.”

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