LMS Monthly Remortgage Snapshot – August Report

Instructions/Completions/Cancellations rate/Pipeline data – % increase/decrease on previous month

Instructions: (Pink arrow down) 8%
Instructions decreased by 8% compared to the previous month
Completions: (Pink arrow down) 28%
28% fewer remortgages were completed in August
Cancellation rate: (Pink arrow up) 6%
The overall cancellation rate increased by 6% compared to the previous month
Pipeline: (Pink arrow down) 1%
Pipeline has decreased by 1% from the previous month

Fast facts

£354.21 average monthly payment increase for those who remortgaged in August
45% of borrowers increased their loan size in August
47% of those who remortgaged took out a 2-year fixed rate product, the most popular product last month
26% said their main aim when remortgaging was to have lower monthly payments.
Remortgage loan sizes

Change in loan size reported by borrowers

• 45% increased their total loan size
• 36% saw no change in their total loan size
• 19% reduced their total loan size

Average loan increase post remortgage: £22,615.38
Average loan decrease post remortgage: £11,327.79

Monthly loan repayments

Change in monthly loan repayments reported by borrowers –

• 49% increased their monthly remortgage repayments
• 16% saw no change in their monthly remortgage repayments
• 34% reduced their monthly remortgage payments

Average monthly repayment increase: £354.21
Average monthly repayment decrease: £211.47

Regional trends

The average remortgage loan amount in London was £370,227 while the average for the rest of the UK stood at £176,365, making remortgage loan amounts 110% higher in London than in the rest of the country.

The longest previous mortgage length was found in the North West at 75.91 months (6.33 years), while the shortest was in East Anglia at 67.60 months (5.63 years), making the longest previous mortgage term 12% longer than the shortest.

Average remortgage amount:  £218,922
Average length of previous mortgages (months):  71.74

Average length of previous mortgage

Region	Months	Percentage change from July
Total	71.74	22%
East Anglia	67.60	19%
East Midlands	72.86	27%
London	72.56	19%
North East	69.15	3%
North West	75.91	19%
South East	70.96	29%
South West	68.49	20%
Wales	72.97	12%
West Midlands	75.22	20%
Yorkshire	73.03	27%

Average remortgage amount

Region	Average Remortgage Amount	Percentage change from July
Total (all regions)	£218,922	-6%
East Anglia	£248,271	-3%
East Midlands	£167,737	-3%
London	£370,227	-9%
North East	£124,844	-12%
North West	£163,139	-2%
Northern Ireland	£136,196	1%
Scotland	£149,585	-5%
South East	£281,093	-7%
South West	£193,358	-9%
Wales	£156,076	3%
West Midlands	£171,238	-4%
Yorkshire	£148,474	-6%

Comment from Nick Chadbourne

Livelier market activity expected later in the season.
August saw the usual seasonal dip in remortgage activity, but the market remains resilient. The popularity of 2-year fixed-rate products suggests borrowers are hedging their bets, looking for short-term protection while keeping options open should rates ease over the next couple of years. With households now back into a routine after summer, we expect activity to build as the year progresses, echoing the rebound we saw this time last year.

Borrower expectations for interest rate increases

• 42% within the next year
• 21% more than a year away
• 36% no expectation for a rate increase

Product Purchasing

• 47% 2-year fixed
• 3% 3-year fixed
• 41% 5-year fixed
• 1% 10-year fixed
• 3% Tracker
• 4% Other

Primary goal when remortgaging

• 26% lower monthly payments
• 30% release equity on property/borrow more money
• 16% security over monthly payments/lock in a good deal now

Fixed-rate purchase motivation

• 77% I wanted the security of knowing how much I’ll be paying each month
• 9% I am worried about the economic climate and wanted to lock in a fixed rate
• 10% My broker recommended this

Methodology

LMS’s UK remortgage lending estimates are forecasts based on our up-to-date internal conveyancing data covering thousands of remortgage completion transactions.

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