Remortgaging was up three percentage points year-on-year due to falling lender interest rates. Meanwhile, the proportion of valuations from people selling their property to buy another fell four percentage points year-on-year, according to research from Connells Survey & Valuation.
“Remortgaging is quickly becoming the dominant activity in the lending market. The record high in August was driven by consumers seeking out better value borrowing,” said John Bagshaw, corporate services director of Connells Survey & Valuation (pictured).
The growth in remortgaging, including buy-to-let remortgaging, has been driven by high levels of competition from lenders who are reducing their rates to attract potential borrowers, said Connells.
Consumers are opting to lock in these lower rates, securing long-term, fixed-rate remortgages ahead of a potential base rate rise later in the year.
Bagshaw commented: “Having benefited from a decade of low interest rates, consumers are sensing the risk that this era is nearing an end. Many older mortgage deals are expiring this autumn which will mean moving onto more expensive standard variable rates. As a result, homeowners on these deals are opting to refinance, taking advantage of the intense competition in the mortgage market right now.”
Moreover, the proportion of valuations from people selling their property to buy another has decreased to 21% of the market in August – down from 25% last year.
“Despite a slight slowdown in transactions this August, official figures suggest house price growth has held up. This rise in property prices means homeowners could now get a better loan-to-value ratio when remortgaging than when they first borrowed – potentially allowing them to lower monthly repayments,” said Bagshaw.