"With total mortgage lending falling, the market share of remortgaging increased to 33% from 28% in March."
A total of 38,475 remortgage transactions were made in April, an 8% increase compared to March and a 10% annual rise.
The value of remortgage lending increased 2% month-on-month to £6.1 billion. The increase in remortgaging activity comes as the CML reports total mortgage lending fell by 11% from £20.7 billion in March to £18.4 billion in April.
Under a fifth (15%) remortgaged to unlock equity to pay off debts, a big jump from one in ten who did the same in March. However, the desire to spend money on home improvements remains the most popular remortgage driver at 24%.
Elsewhere, with the average mortgage rate remaining at 2.13%, remortgagors sought to fix for longer. Of those who remortgaged in April, over a third (34%) fixed for five years, in contrast to one in twelve (8%) who previously had a fixed five-year deal.
With real wages falling by 0.2% in the first three months of the year, a greater number of remortgagors consulted a broker in April. Three quarters (72%) consulted a broker, in comparison to the two thirds (63%) who did so in March.
57% cited the wish to make the best savings possible as their motive for consulting a broker in April, in comparison to under half (47%) in March.
Andy Knee, chief executive of LMS, commented: “The remortgage market had a good month in testing conditions. With total mortgage lending falling, the market share of remortgaging increased to 33% from 28% in March. The number of deals increased annually by 10% and month-on-month by 8%. In the next few months, the General Election and Brexit negotiations will cast a shadow of doubt over the future of the purchase market. Homeowners should seriously consider remortgaging now while rates remain low and in case market conditions worsen significantly.
“The fall in real wages in the first three months of the year has placed a real strain on family finances. Despite this, it is encouraging to see increased numbers of homeowners planning their finances in advance by remortgaging in order to pay off debts, and consulting with brokers in the process, to ensure they get the best possible deal.”