• February remortgage lending falls to £2.6bn, down 11.3% on January’s £2.9bn.
• Compares with the CML’s total gross mortgage lending figure for February, which is down 8% on January to £10.5bn from £11.4bn.
• Remortgage lending still accounts for nearly a quarter (24%) of the gross mortgage lending total
• Those remortgaging are each taking out an average of £14,214 in extra equity (above the value of the redeeming loan), up 9.3% on January. This implies a total of £253.2m equity withdrawal by remortgaging in February
LMS figures reveal that monthly gross remortgage lending decreased by £325m in February to £2.6bn. This is down 11.3% on January’s £2.9bn reported by the Council for Mortgage Lenders (CML) last week.
The CML has also reported that total gross mortgage lending fell 8% in February to £10.5bn, from £11.4bn in January. As a result, remortgages have broadly maintained their share of the mortgage market (24%).
Although gross remortgage lending fell 11.3% in February it is down only 1.8% on February 2012, painting a less volatile picture of the remortgage market over the long term.
LMS estimates that the total number of remortgage loans in February decreased by 12.4% to 17,812, compared with 20,332 in January.
The average remortgage loan amount however has risen consistently since May 2012 and now stands at £143,333. This is 6.6% higher than the time last year.
Commenting on the latest figures, Andy Knee, Chief Executive of LMS says:
“February’s monthly 11.3% dip in remortgage lending can at least partly be attributed to a lull in remortgage applications over the Christmas and New Year period. However, the fact that it was still annually down by 1.8% suggests that the FLS still needs more time to bed in and we would urge the Government to continue with the scheme in its current form. This is hopefully now looking more likely in light of the Chancellor’s Budget statement.
“An extension of the FLS, together with continuing falls in mortgage rates for both new and existing borrowers, suggests that all types of mortgage lending should grow strongly over the coming months.”