Remortgage instruction volumes across the UK fell by 31% between July and August, according to new data from LMS.

The conveyancing solutions provider revealed the number of remortgage completions fell by 14% between the two months, while pipeline figures also saw a fall of 18% in August as volumes dropped off.

The data showed that the cancellation rate for remortgages remained steady between July and August and only showed a fall of 0.3%.

LMS CEO, Nick Chadbourne, suggested the drop in activity levels across all the LMS major indicators in August was mainly driven by a “focus from all stakeholders on the home-moving market”, as borrowers looked to make the most of the temporary stamp duty changes.
 
“We also have a spike of product expiries at the end of the year rather than the usual October increase,” Chadbourne commented. “This may lead to a flurry of remortgage activity towards the end of the year as borrowers look to secure a new fixed rate deal.

“It will be the continued development and adoption of security and tech solutions that will be key in helping brokers and lenders manage the spikes in activity come the end of the year.”

Statistics from the latest LMS Monthly Remortgage Snapshot also revealed that for those who remortgaged during August, the average monthly payment decrease was £200.76.

Fifty per cent of all borrowers reduced their monthly remortgage payments during August, the data showed, while 37% increased their monthly payments at an average monthly increase of £194. The remaining 13% of borrowers saw no change in the amount they repay each month.

“Taking a deeper look into customer borrowing habits, it is promising to see that half of borrowers who chose to remortgage in August saw a significant decrease of just over £200 in their monthly payments,” Chadbourne said. “This comes as lenders continue to offer attractively priced fixed-rate packages as they pass their lower borrowing costs onto customers.

“This will come as a welcome relief to borrowers looking to remortgage to reduce outgoings as the economic uncertainty caused by COVID-19 continues, and the end of many government support schemes come into sight.”

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