"Despite uncertainty in the wider economy, our data also shows the intermediary channel continuing its recent success in matching consumers with suitable products"
This is eight percentage points higher than Q3 2016, when 80% of applications led to offers. Furthermore, the number of offers that led to completions rose by six percentage points year-on-year, from 83% in Q3 2016 to 89% in Q3 2017, to reach the highest point since IMLA's Tracker began in Q1 2016.
Overall, 78 out of every 100 remortgage applications completed during Q3 2017 – the highest out of all segments tracked in the mortgage market – with lending data showing remortgage activity spiked by 20% in September alone. Back in Q2 2016, only 59 in every 100 remortgage applications reached completion.
Separate survey data from IMLA suggests a significant rise in borrower demand for fixed-rate mortgages during the first half of 2017.
Three in four (76%) brokers reported an increase in demand for five-year fixed rates during the first six months of the year, with 23% stating that demand had increased substantially. Nearly seven in ten (69%) lenders stated demand had increased, with 16% noticing a substantial increase.
The rise in remortgage completions comes amidst an overall positive picture for the mortgage market in terms of consumers’ access to finance. Total mortgage applications that led to offers reached 88% in Q3 2017, up by 13 percentage points year-on-year from 75% in Q3 2016, while total offers that led to completions reached 86%, up from 74% in Q3 2016.
This outlook is reflected across all segments of the mortgage market, with buy-to-let, first-time buyer, homemover and specialist lending segments also showed signs of strength as the percentage of offers to completions increased across the board.
Peter Williams, Executive Director of IMLA, commented: “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% Bank rate for the next two, three, five or even ten years.
“While customers who remain on tracker and standard variable rates are now adjusting to the first increase in monthly loan repayments in the last ten years, unwavering borrower demand and lender supply should maintain competitive residential loan-to-value mortgage pricing.
“Despite uncertainty in the wider economy, our data also shows the intermediary channel continuing its recent success in matching consumers with suitable products, helped by strong competition and appetite to lend within the boundaries of careful affordability rules.”
