"As the purchase market continues to boom, supply is the only factor which might slow it down."
Instructions increased by 16% in June, with the overall cancellation rate falling by 0.45%. However, 5% fewer remortgages were completed during the month.
55% of borrowers increased their loan size in June, with 36% of remortgagers' primary aim to release equity from their property.
49% of those who remortgaged took out a five-year fixed rate product and the average monthly payment decreased by £200.
Nick Chadbourne, CEO of LMS, commented: “Steady activity and easing restrictions continued to improve lender confidence in June which gave borrowers greater product choice and better deals. However, instructions were still not as high as we would expect in the lead up to the large number of ERC expiries in July. This means that many borrowers who are remortgaging are opting for a product transfer. As low interest rates are still in place across the board, staying with the same lender may give borrowers a cheaper rate than switching, but it is still important that borrowers shop around to ensure they are getting the best deal possible.
“As the purchase market continues to boom, supply is the only factor which might slow it down. The end of the stamp duty holiday will have had some impact, but the key drivers to move out of cities, find green space and upsize are all still there to drive demand. Until supply is properly addressed, inflated house prices and competitive mortgage rates are expected to stay. We expect to see more borrowers opting to stay put in this environment, boosting remortgage activity and contributing to a healthy pipeline in the coming months.”
