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Remortgage frenzy ahead with £35bn of maturities by October-end

  • 05/09/2017
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The remortgage spike in the summer was just the start of a tsunami of potential business for mortgage advisers with £35bn worth of maturities due by the end of this October.

According to data from consumer data company CACI, more than £35bn worth of mortgages are due to mature in September and October, 70% of which came from intermediary business, prompting clients to look for new deals.

Remortgaging activity rose 60% over the Summer from June  to August against the previous year with an even bigger spike in August with a 68% rise in applications.

David Robinson, national intermediary sales manager at Accord, said: “It’s positive that borrowers are taking action before their deal comes to an end. Many could see a significant reduction in their monthly repayments thanks to a favourable shift in house prices and interest rates.

“The surge is also great news for intermediaries who have an important role to play advising their clients on the best remortgage deal for them.”

CACI research, passed exclusively to Mortgage Solutions, shows £133.1bn of mortgage maturities in H2, with another £110bn in H1 2018 and even more at just over £133bn in the second half of next year.

Exclusive research from Countrywide out yesterday also on Mortgage Solutions showed low interest rates have long been encouraging home owners to take out further advances on top of those remortgages to redevelop properties as a lack of available homes takes effect.

The additional value borrowed has more than trebled in value in the last two years alone with more than one in five remortgagors taking out additional capital in the last 12 months.

According to LMS, the number of people remortgaging their home in July increased by 12% from 34,300 in June to 38,348. In addition, the value of remortgage transactions increased by 3% between June and July – from £6bn to £6.2bn.

The average annual repayment fell from £8,197 in May to £8,080 in June. Meanwhile, the percentage of total income that the average annual mortgage repayment accounted for dropped to its lowest level this year, from 17.5% in May to 17.1% in June.

Andy Knee, chief executive of LMS, said affordability hit a year-long high in July: “This propelled overall activity. With interest rates still low and lenders competing with one another to offer customers the best possible deal – there has never been a better time to remortgage in 2017.”

Terry McCutcheon, CEO at network The Financial Planning Group said : “Our approach to any “flood of mortgage maturities” is approached in the same way as we would during a relatively quiet period – we keep close to our clients through a successful and proven CRM strategy and ensure that our clients know where we are and what we do by keeping in regular touch through ongoing service.

“We find many mortgage borrowers do not have either the appetite or the enthusiasm to review their mortgages, or perhaps do not even recognise the benefits of a good mortgage adviser, who will be able to help them look for a more competitive rate. We actively promote re-mortgage opportunities to new clients through our Finance Planning website; for example our 30 second challenge to see if we can save borrowers money on their mortgage – simple but effective.”

Broker and Coreco director Andrew Montlake, said: “We have certainly seen an uplift in enquiries throughout August with a large amount of people looking at their remortgage options. In actual fact, we had the highest number of leads ever through our re-launched website last month and the live chat facility is proving very popular.

He added that the firm also has a proactive, professional client servicing team who have been working hard throughout the year to ensure all clients are dealt with “smoothly, professionally and passed to the right adviser.”

“What is also pleasing is the numbers of first-time buyers that have been returning to the market. Add to this the buy-to-let changes and I suspect it will be a busy last quarter for all brokers,” he added.

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