Remortgage instruction volumes remain steady in September – LMS

Volumes for remortgage instructions remained steady during September, falling by just 1.3% over the month, according to new data published by LMS.

The conveyancing solutions provider also revealed that remortgage completion volumes showed a monthly drop of 21.8%, however, while the cancellation rate increased by 2.55% to 7.81% in September.

Falling completions and growing cancellations also led to a pipeline contraction of 14% in the reportage market, LMS stated.

The data also showed that 47% of borrowers increased their loan size in September, and LMS CEO, Nick Chadbourne, highlighted that housing market activity had grown during the month at the fastest pace for four years.

“While we are seeing many remortgagers increase their loans, potentially for home improvements, it appears many more are looking to move to a new home, and prices have been driven up accordingly,” he said.
Chadbourne also suggested that the housing market is “unlikely” to remain immune to tough external factors, and that the stamp duty holiday granted is likely to be a significant factor in increased recent activity.

He added: “Though we are expecting the balance to shift back towards remortgaging, in part down to the expected surge in ERCs at the end of the year, we will also see two spikes in the home moving market, which will have a negative impact on remortgaging.
“The first will be just before Christmas, as borrowers look to move before the holidays, and the second will be at the end of March when the stamp duty exemption comes to an end. At both of these times lender and broker capacity to handle full remortgage cases will be extremely stretched, so we will likely see far more remortgagers reverting to product transfers.
“It’s also likely we’ll see a change in the pattern of remortgage instructions as the increasing number of movers stop worrying about changing their current mortgage deal. This will create a slowdown, partly because of the dominance of five-year fixes in recent years.”

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