This would put the market on course for more than £200bn of product transfer refinancing this year, far higher than previous estimates of between £100bn and £140bn.
The UK Finance data showed 390,200 homeowners switched product with their existing provider between January and March.
Perhaps unexpectedly, the majority of the market is through advised channels in both customer numbers and value of transactions – this includes independent mortgage brokers and lenders’ in-house telephone and branch advice.
Of the total number of product transfers, 203,200 worth £29.5bn were conducted on an advised basis, with 187,000 worth £24.2bn completed through execution only.
FCA ignoring large segment
Association of Mortgage Intermediaries chief executive Robert Sinclair, who has been calling for the figures to be published, welcomed the release and was surprised at the size of the market.
He also said the data made it more disappointing that the Financial Conduct Authority (FCA) had not reviewed this part of the sector within its mortgages market study.
“Since purchase and remortgage business was about £61bn it’s clear product transfers are a significant part of the market,” he said.
“It’s undoubtedly larger than was expected and interesting because the volume data that came out of the FCA’s market study didn’t indicate it was going to be that large.
“It does throw in to challenge the work that the market study has done in that this is such a large part of the market to be ignored,” he added.
However, Sinclair was pleased at the split showing the majority of the work was done through advised channels.
“I think that will surprise people and it is better news than most would have expected as they probably thought product transfers were mostly done on an execution only basis,” he said.
“Of course, it will still leave about £80bn of mortgages per year being completed on an execution only basis where consumers have less protection.”
The data is for residential transactions only, so does not include buy-to-let mortgages, and it has not been included in any other previously published data, including by the Bank of England or FCA. UK Finance said it plans to continue publishing the data on a quarterly basis
UK Finance director of mortgages Jackie Bennett said the figures echoed the FCA’s findings in its interim mortgages market study that customer engagement is high and the majority of mortgage customers switched to a new deal shortly after their previous deal expires.
“Our data also supports the FCA’s observation that most borrowers choose to remain with their current lender when they switch product,” she said.
“It’s a positive outcome for consumers that they can make these transactions in a wide variety of ways to suit their needs. Borrowers who know exactly the product they want can elect to switch quickly and efficiently through the execution-only route.
“But, for those who require help in choosing the right product, mortgage advice is widely available through both direct channels and from intermediaries, with more than half of borrowers taking advice for their new deal,” she added.
The trade body said it had recognised the FCA’s points regarding perceived areas of weaknesses within the market, particularly around customers who currently may be unable to switch products, and that it would be working through the FCA’s recommendations.