But as the dark nights draw in, huge numbers of homeowners will have decisions to make about their mortgage choices. The number of remortgage cases in the pipeline is already increasing and is likely to continue to do so until the end of the year.
Busy times ahead
A key driver behind the rising cases is the historically low interest rates being offered by banks and building societies. Competition between lenders continues to be fierce, with many taking advantage of the Bank of England’s reduced base rate to offer competitively low prices.
Borrowers will be looking to capitalise on these headline rates and lock in a new fixed-rate deal before their term expires. Doing this soon would mean they are protected for longer if the base rate does increase next year to combat rising inflation – bringing up mortgage rates with it – as was predicted and is already starting to be seen.
It is unsurprising, therefore, that according to our recent snapshot almost half of those who remortgaged in August took out a five-year fixed rate product for long-term stability in their mortgage repayments, which would help them to weather any price rises.
As December marks the largest volume of early repayment charge (ERC) expiries in the year, borrowers will no doubt be assessing their options early to lock into the cheapest deals ahead of the festive season.
Starting 2022 off on the right foot
Due to a boom in transactions earlier this year, many banks and building societies have already exceeded their lending expectations for 2021 and will no doubt be preparing for the year ahead by cleaning up their back books and completing any outstanding sales and purchase cases.
Those who do so will start 2022 strongly, with a solid stream of remortgage completions.
In addition, the heightened number of transactions from earlier in the year has created a backlog for some conveyancers who are struggling to keep pace with high sale and purchase pipelines. However, this is not industry wide and many conveyancers will have plenty of scope to process remortgage completions.
A panel managers’ role is important here, helping to relieve some of this pressure by ensuring that instructions are distributed evenly amongst conveyancers to account for any variance in capacity and ensuring that all cases are processed efficiently for the borrower.
Overall market health
Despite a slowing of remortgage instructions in the earlier part of the year, pipeline activity remained strong throughout August according to our latest data. This is set to continue throughout the year in the run up to the large volume of ERC expiries, a clear sign of a healthy remortgage market.
While increased pipeline activity is a positive sign, lenders cannot be complacent and must be proactive in cleaning up their backlogs if they are to start the new year on solid ground in terms of remortgage completions.
