Levels of remortgaging reached the highest level for seven years in August, while the average amount borrowed decreased.
Figures from conveyancing firm LMS found that remortgage numbers rose to 36,195 in August, up 8 per cent on July, an increase of 45 per cent on the same month last year and the highest level since July 2009.
However, the average loan amount fell by 6 per cent to £162,263 in August, with a total of £5.9bn borrowed in remortgaging for the month, down from £6bn in July.
The average remortgage LTV also decreased, down from 58 per cent in July to 54 per cent in August. LMS chief executive Andy Knee says the cut to the base interest rate influenced the remortgage market.
“Mortgage interest rates had already fallen to record lows, which along with rising house prices has encouraged a greater number of homeowners to remortgage their homes. Indeed, last month saw the highest number of remortgages for seven years,” says Knee.
“However, in spite of this rise, homeowners appear to be in a more cautious mood than last month: borrowing less in the wake of a couple of turbulent months, both politically and economically, and lowering their LTV in the process. This means, despite a greater level of activity, the value of gross remortgage lending has fallen for the first time since May 2016.”
In August 2015, the average remortgagor had held their previous mortgage for a period of five years and three months. However, August 2016 saw this reduced by eight months to four years and seven months as people are motivated to reassess their current deal.