UK remortgages up 45% year-on-year

10th October 2016

UK homeowners are opting to remortgage their homes more frequently than a year ago, according to new research from property services provider LMS. The data showed that August remortgage transactions were at their highest levels since July 2009.

Buoyed by increased house prices and low interest rates, the number of remortgage loans taken out in August totalled 36,195, up 8% compared with July figures and 45% compared with August 2015.

However, despite the increase in volume, the overall value of remortgage lending dropped by 2% from £6 billion in July to £5.9 billion in August.

The average loan-to-value (LTV) on remortgages also dropped from 58% in July to 54% in August, although this was flat with August 2015. Homeowners who remortgaged their homes in August 2016 released £31,589 of equity, down 11% from £35,590 in August 2015.

Andy Knee, CEO of LMS, said: “The Bank of England’s decision to cut the base interest rate continues to have a positive impact on 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.

“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.”

*2 year fixed with TSB 1.09% then 3.59% - APRC is 3.3% Max LTV is 60%. Quoted on 27th May 2020.