Monthly gross remortgage lending increased by £168m in January to £2.9bn, according to LMS’s latest Remortgage Report.
This is up 6.2% on the £2.7bn reported by the Council for Mortgage Lenders (CML) for December and marks the first monthly growth since October.
However, according to the latest figures released from the CML, total gross mortgage lending fell 8.8% in January to £10.4bn, from £11.4bn in December. This is the lowest it has been since April 2012. Bad weather over the last two months has discouraged customers from finding properties and taking out a mortgage, but clearly this has not had the same impact on those remortgaging, LMS said.
Remortgaging now represents a larger percentage of the total market – 28% – which is the highest proportion since October 2012 (31%).
Although the £2.9bn of gross remortgage lending in January is 6.2% higher than in December it is still 26.2% lower than the same time last year (£3.9bn – January 2012). This time last year the market was fuelled by borrowers taking action as lenders began to increase their SVRs.
LMS estimates that the total number of remortgage loans in January increased by 5.5% to 20,332 compared with 19,279 in December.
The average remortgage loan amount has risen consistently since May 2012 and now stands at £141,548. On an annual basis it is only 4% higher than at the same time in 2012 (£136,083 – January 2012).
Andy Knee, chief executive of LMS, said: “Seasonal factors and bad weather in December had a severe impact on purchase lending in January, but the same cannot be said about remortgaging.
“The remortgage market has resisted a normal seasonal downturn, reaping the benefits of competitive rates which are now available because of the Government’s Funding for Lending Scheme (FLS).
“We expect this growth to continue into February and March.”