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Remortgages spike ahead of base rate rise: IMLA

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Remortgage activity spiked in Q3 as homeowners tried to protect themselves from an expected Bank of England base rate rise, according to the Intermediary Mortgage Lenders Association.

IMLA says 88 per cent of remortgage applications resulted in offers in Q3.

This is eight percentage points higher than Q3 2016.

The number of offers leading to completions rose by six percentage points year-on-year, from 83 per cent in Q3 2016 to 89 per cent in Q3 2017.

IMLA says this is the highest level for completions since it began its tracker in Q1 2016.

Overall, 78 out of every 100 remortgage applications completed during Q3 2017.

IMLA executive director Peter Williams says: “After a decade of record low interest rates, the timing of a possible rise was widely debated before November’s decision, both within the Bank of England and in the mortgage market, and this was clearly resonated in homes across the UK too.

“As a rise became more of a certainty, significant numbers of homeowners have rushed to secure fixed rate mortgages priced to a 0.25 per cent Bank rate for the next two, three, five or even ten years.”

Fixed rate boom

The trade body also saw a big boom in borrower demand for fixed-rate mortgages during the first half of 2017.

Three in four (76 per cent) brokers reported rising demand for five-year fixed rates during the first six months of the year.

Nearly a quarter (23 per cent) said demand had increased substantially.

Nearly seven in ten (69 per cent) lenders stated demand had increased, with 16 per cent noticing a substantial increase.

IMLA’s quarterly tracker uses data from BDRC Continental.

 

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