"Increasing cancellations volumes are cause for quiet concern and something we will continue to monitor as the month continues."
Cancellations in June so far are also 38.9% higher than the average weekly volume across all weeks in May.
LMS says old and inactive cases are being cleared by legal teams as firms settle into Covid-19 working, and this is likely to be behind this increase.
Remortgage instructions ran 6% higher than in June 2019 and LMS says this increase in instruction levels is a "positive sign of overall market health improving and a return to normal". Month-on-month, instruction volumes were also 7.3% higher in the first week of June than in the first week of May.
Instruction volumes increased by 6.7% from the final week of May to the first week of June. For the last three weeks instruction volumes have remained steady, with less than a 10% variation between volumes.
June completion volumes have reduced from those recorded in May, which could be linked to seasonal ERC expiries as June is historically a quieter month.
Weekly data has demonstrated that it is typical for completion volumes to spike in the first week of each month and June has proven to be no different, but when looking at the bigger picture, completion volumes are down 30.2% compared to volumes in the first week of May.
June commences with the pipeline volume 4.2% lower than at the beginning of May, and this is reflective of the rising completion and cancellation rates.
If instruction volumes continue to rise at lower rates than cancellations and completions, June’s pipeline will continue to contract and could potentially impact July and August, which are historically busy months.
Nick Chadbourne, CEO of LMS, commented: “The first week of June marks another consistent week of healthy instruction volumes. We are seeing a continued return towards stability in this area, with a consistent increase in new cases coming onto the books. It is particularly promising to note that when making year on year comparisons between June 2019 and June 2020, we are seeing increased volumes at present.
“Increasing cancellations volumes are cause for quiet concern and something we will continue to monitor as the month continues. Rising levels could be caused by offers from Q4 2019 expiring and firms clearing out aged cases at the beginning of the month. Moreover, as the Covid-19 crisis continues and borrowers’ circumstances continue to change and new deals enter the market, previously attractive offers may become unappealing. This could be having a knock-on effect as borrowers look to change deals and ensure they are getting the best available product at that time.”
