He said: “This represents a huge opportunity for advisers to talk to their customers about remortgaging, and to help them lock in the best deals available to them. As more brokers work to secure the best possible outcomes for their clients, there’s no reason why today’s remortgage numbers can’t continue to rise as we look ahead to the rest of the year.
“For certain borrowers, a product transfer may be the best option – another reason why advisers should be checking in with clients and reviewing their circumstances regularly. This is an area of the market I hope will be more frequently and robustly reported on in the future,” he added.
UK Finance figures out this morning show in June, the final month in Q2, there were 16,880 new remortgages with additional borrowing, 8.3 per cent higher year-on-year.
The average amount borrowed was £56,100. There were also 15,320 new pound-for-pound remortgages in June 2019, 23.9 per cent fewer than in June 2018.
Fewer fixed-rate mortgages came to an end and the growing popularity of product transfers partly accounts for this, said the trade body.
Landlord mortgages
In buy to let, however, both purchase and remortgage financing has been trending downwards.
Around 5,300 new buy-to-let home purchase mortgages completed in June 2019, 3.6 per cent fewer than this time last year, with 12,500 remortgages in the buy-to-let sector, 0.8 per cent fewer than the same month in 2018.
In June 2018, the number of five-year fixed rate mortgages overtook the number of two-year deals across the market for the first time.
This trend has continued into 2019, with five-year fixes remaining the most popular product options for new mortgages.
On residential and buy to let, Callum Bilbe, analyst, data and research, UK Finance said in his blog this month: “This, coupled with some borrowers locking into attractive rates early, may have contributed to the slight drop in the number of homeowner mortgage deals coming to an end, with 400,000 ending in Q2 2019 compared to 440,000 in Q2 2018,” he said.
Making their move now
Andrew Montlake, managing director, Coreco, said the stupendously low’ remortgage rates have also driven frenzied remortgage activity through June and July.
“Paradoxically, the growing likelihood of a no-deal Brexit and the uncertainty that could bring has created a lot more activity in the mortgage market,” he added.
“Homeowners and prospective buyers are wary that lenders could retreat into their shells if it all goes pear-shaped and even raise rates so they’re making their move now.”
Montlake said a lot of households have concluded there is as much risk to the wait-and-see approach to Brexit as simply getting on with it.
“Better the Brexit devil you know than the one you don’t.”
Conor Murphy, CEO of Smartr365, agreed that homeowners were choosing to improve not move, adding: “Consistent mortgage lending is good news for brokers, as consumer demand remains strong for intermediaries and advice.”
The popularity of product transfers continues to soar with 1.2m borrowers refinancing this way last year, against 460,000 remortgages, with the trade body’s next data on the sector out on 23 August.
