The start of a remortgage resurgence?

It seemed to, this somewhat uncool 40-something, that the acts which went down the best were somehow echoes of our past, notably 70/80s legend Lionel Richie cramming 100k-plus in front of the Pyramid stage and a band like Suede – at their chart peak in the 90s - ripping it up on the John Peel Stage. In other words, ‘Hello, is it a quality back catalogue you’re looking for?’

The answer to that question for many punters is yes. In life, as in business, it’s completely natural to look back on one’s heyday – normally a time of youthful exuberance where the responsibilities didn’t seem so great and you apparently could survive on the best part of next to nothing. How things change as you get older, indeed, there will be many practitioners in our industry who have no halcyon days to look back to, given they are so new to the market. Instead, they will be forced to listen to grizzled ‘oldies’ harping on about the good times pre-Credit Crunch when money was freely available to anyone and everyone, and selling mortgages was as easy as shooting fish in a barrel.

Well, to use another phrase, ‘Those days are gone Grandad’ and instead we have to get to grips with today’s smaller market, today’s regulatory environment, today’s affordability constraints, today’s lack of housing supply, today’s advice requirements, today’s lenders and providers – today’s the day. Of course you’re never sure what the future may bring but part of me does think that when we look back at the market of 2014/15 we may be able to view the start of a stronger mortgage market. Nowhere near the levels of 2006/7, and probably wisely so, but there is evidence to suggest that the tide has not only turned but is going in the right direction.

One signal that may be extremely pertinent in this regard is the state of the UK remortgage market – for a long time this has been the poor relation and, still compared to the purchase sector, it trails behind. However, recent figures from the Bank of England do show some positive movement – approvals for remortgaging reaching 36,003 in May compared to an average of 33,090 over the previous six months. Loan approvals for house purchase were also up – running at almost double actually with 64,343 in May compared to a six-monthly average of 61,844.

So, while it’s not cause for massive celebrations it does seem to show more borrower appetite to remortgage along with (perhaps) a less intensive and stringent operation of post-MMR affordability policies by lenders. Now, brokers might well baulk at this idea but it appears to have been the case that many lenders have moved away slightly from the tight criteria they adopted immediately post-MMR which means it should make the remortgage market a more attractive one for would-be borrowers.

The other point to make is that no-one in their right mind can believe a 0.5% Base Rate is going to be the case for that much longer. Even if it continues into quarter two next year, which again seems increasingly unlikely, the remo deals that are currently available, particularly long-term fixes, do seem too attractive to turn down especially for those looking for payment certainty over three to five years.

So, is this the start of a remortgage resurgence which will be looked on with much fondness for years to come? Who can possibly tell, but brokers certainly have an opportunity to grasp here, and more remortgaging business also means more opportunities for that all-important business diversification – be it insurance, protection or conveyancing. Therefore, now is the time to position yourself to provide that remortgage advice and those other services – as Sunday’s headliners, The Who, almost said, don’t get fooled again.