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LMS: Remortgaging hits 7-year high

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Monthly gross remortgage lending rose to a seven-year high of £6.2bn in January 2016, according to new figures from LMS.

The figure is the most lent in a month since November 2008, when £7bn was recorded.

The value of gross remortgage lending is also up 45 per cent year-on-year, with £4.3bn lent in January 2015.

The number of loans also increased by 37 per cent in January 2016, to 36,666 (26,800: January 2015).

But LMS says this is still the largest amount recorded in the month of January, as borrowers take advantage of rising house prices and competitive rates.

Average equity withdrawn is also 36 per cent higher than January of last year (£19,021).

The total amount of equity withdrawn rose by 23 per cent month-on-month from £774.2m in December 2015 to £951.6m in January 2016.

The average remortgage loan size hit an all-time high of £170,319 in January, up 8 per cent from December and 12 per cent year-on-year.

LMS chief executive Andy Knee says: “Although the month-on-month growth in remortgaging can be partly attributed to a seasonal uplift and a New Year financial spring clean – as well as a Stamp Duty panic – other factors are working in favour of the market.

“With rising house prices, interest rates at historic lows and a host of competitive products available to choose from, growth is likely to continue even after the Stamp Duty panic dispels.

“Swap rates are also expected to decrease in mid to late February, lowering the lenders’ costs of loans further and boosting competitive offers.

“Mark Carney’s indication that the base rate will stay low for a while longer means borrowers will continue to enjoy great rates. On top of that, the shadow of a Brexit and global economic uncertainty looms on, precluding a Base Rate rise. However it would still be advisable for savvier borrowers to lock into low rates to maximise their cost savings.”

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