Activity in April, however, is already up 30 per cent month on month.
LMS reported a stable start to last month’s remortgage conveyancing activity, with a steady flow of instructions until tighter restrictions on social gatherings were announced.
The clampdown caused a 20 per cent drop off in new instructions after lenders responded by withdrawing hundreds of mortgage products above 80 per cent loan to value (LTV).
The restrictions are expected to have the biggest impact on complex cases, with a reduced range of products available to this group
Since the initial shock to the market, instructions have remained steady preventing further decline.
April ahead already
April volumes are already up 30 per cent compared to March and are ahead of 2019 activity. LMS said this was largely down to a peak in the expiration of early repayment charges (ERCs).
Some 11 per cent of all ERCs for 2020 end in April.
But there is a slowdown in pipeline activity due to the processing challenges faced by lenders and conveyancers as they manage capacity and cope with remote working restrictions.
Over time, LMS expects restrictive criteria to loosen as lenders start to understand the risks and opportunities around automated valuation models (AVMs), with desktop valuations for more complex work and deals becoming available in the future.
Nick Chadbourne, chief executive of LMS, said: “March 16 was a critical moment for lenders, with many removing 80 per cent and above LTV products and limiting the progression of complex cases, delivering the drop in instructions we witnessed.
“The remortgage sector remains fully open for business, and as it refines processes and adapts to this new situation, capacity will only increase.
“We’re in uncharted waters to some extent, but knowing how the market is performing in real time could make a big difference for firms attempting to navigate their way through the crisis. As such, we’ll be sharing information on as many useful data points as we can.”
LMS will release data on weekly changes in market performance as the coronavirus pandemic continues.