Remortgage growth in October exceeds all optimistic expectations
The latest figures from LMS reveal that the value of monthly gross remortgage lending has risen to £6.1bn in October, 20% higher than September’s CML figure of £5.1bn, showing that the rate of increase accelerated sharply, exceeding expectations.
This is also up by 49% from October last year when £4.1bn of remortgage loans were recorded. The last time remortgage lending topped £6bn was in January 2009, when remortgaging also reached £6.1bn.
October 2015 also saw a 22% rise in the number of remortgage loans taken out by borrowers, increasing to 37,744 from 31,000 in September 2015. This is up 40% from the 27,000 remortgages recorded in October of last year.
The total amount of equity released by remortgaging was £1.1bn in October, 13% higher than last month and 141% higher than the £454bn recorded in October last year. This is just the second time this year that equity withdrawal has topped £1bn (£1.1bn in June 2015). Prior to this the last time such levels of equity were withdrawn was back in May 2008, when remortgage borrowers extracted £1.2bn of equity.
Commenting on the latest figures, Andy Knee, Chief Executive of LMS said:
“Remortgaging is back with a bang, and rightly so as borrowers capitalise on the competitive offers currently available. However, we’re nowhere near pre-recession levels – when monthly lending frequently exceeded £10bn – showing that there is plenty of capacity for continued growth over coming months and years.
“We have all the right conditions in place for a remortgage resurgence; lender appetite for growth in business; a plethora of competitive deals available in the market; and homeowners sitting on unparalleled housing stock value, which surpassed £5.1tn* in August of this year. The general increase in all segments of the lending market is further underpinned by a general sense of economic prosperity.
“For now, we await the release of the Chancellor’s Autumn Statement, to gauge whether there will be a change in housing policies which could impact activity in the New Year. So far, government policies, like extending development rights to convert offices into residential units have offered some respite, but we can’t escape the fact that a severe shortage lies at the heart of the housing challenge, further compounding a growing inequality between the haves and have-nots.”