LMS: Remortgagers taking out record amounts of equity in November

Customers releasing more cash in the run up to Christmas

  • November remortgage lending rose to £4.22bn, up 0.4% on October’s £4.20bn. November’s figure is also 24.1% higher than this time last year.
  • Total gross mortgage lending fell to £17.0bn; remortgaging now accounts for 25% of the total market.
  • Those remortgaging are each taking out an average of £26,498 in extra equity (above the value of the redeeming loan). This figure is not only 22.8% higher than the previous month and 33.5% higher than this time last year – but it is in fact the highest figure on record.
  • This figure implies the total amount of equity withdrawn by remortgaging in November to be £741.1m.

LMS figures reveal that monthly gross remortgage lending increased by £18m in November to £4.22bn. This is up 0.4% on October’s £4.20bn reported by the Council for Mortgage Lenders (CML) last week, and 24.1% higher than this time last year.

The CML has also reported that total gross mortgage lending fell to £17.0bn in November. As a result, remortgages now represent 25% of the total market.

LMS estimates that the total number of remortgage loans in November dropped to 27,968, compared with 28,300 in October. However, despite this, the number of remortgage customers in November is still 5.9% higher than this time last year (26,400).

The average remortgage loan amount has risen slightly (by 1.0%) over the past month and now stands at £150,822. This figure is also 8.8% higher than this time last year.

Commenting on the latest figures, Andy Knee, Chief Executive of LMS says:

“While the CML reported total gross mortgage lending to be down slightly over the past month, the remortgage market has resisted the seasonal dip and is up 0.4% on October’s figure.

“In November, remortgage lending continued to climb as savvy customers flock to the array of competitive rates on offer. Our latest customer survey suggests that more than a third (35%) were able to reduce their monthly payments by up to £500*.

“Last month remortgage customers released more cash than ever before, over £26,400, which will most likely be used to fund a festive spending spree. Looking ahead into the New Year, we are likely to see activity levels continue to rise, although the introduction of the Mortgage Market Review (MMR) in the spring may prove to be something of a rumble strip.”

UK Paper Summary: 27th November 2013

Personal Finance

Brits are withdrawing more cash from their properties to pay for Christmas, according to The Sun. New research from LMS shows borrowing against an existing mortgage is 30 per cent higher than a year ago, as total remortgage lending rose to £4.73 billion in October. That was equal to the average homeowner releasing £21,579 in extra equity. Andy Knee, chief executive of LMS said: “About 18 per cent of the equity released will go on home improvements, 11 per cent on debt repayment and 71 per cent on Christmas.” (The Sun p.43)

Economics

Mark Carney yesterday raised his doubts about George Osborne’s Help to Buy mortgage scheme, telling MPs on the Treasury Select Committee that there was yet to be any evidence that the scheme was encouraging more homes to be built. He told MPs that the main constraints holding back the supply of new homes were Britain’s difficult planning regime, and the shortage of construction materials.

And Chancellor George Osborne announced that he would be bringing forward a Bank of England review into the ‘leverage ratio’ from 2017 to this year. After intense pressure from his peers, the chancellor announced that he would be reviewing whether the Financial Policy Committee need additional powers over the leverage ratio, which controls the volume of risky lending by banks (The Times p.8)

Recruitment

The north-south divide in the jobs market has widened sharply, buoyed by a rise in construction vacancies in the South, according to the latest Jobs Report from job search engine Adzuna. Nine of the ten best cities to find a job were in the South of England, while nine of the ten worst were in the North, and it was 100 times more difficult to get a job in Salford, where there were 28 jobseekers per vacancy, than in Cambridge, where there were just 0.28 jobseekers per vacancy. (Financial Times p.4, The Sun p.10, Guardian p.25)

Whistleblowers require more protection, to encourage them to speak out about wrongdoing at work, according to a report by Public Concern at Work. Experts have made 25 recommendations to tackle the ‘culture of silence’ including simplifying and strengthening the Public Disclosure Act, adding measures to prevent the gagging or blacklisting of whistleblowers, and getting board-level staff to audit whistleblowing arrangements. Cathy James, chief executive of Public Concern at Work said: “We’ve had so many scandals and in each case there have been questions asked why people are not speaking up. It’s a problem that needs official attention.” (Daily Telegraph B6, FT p.23, Guardian p.37)

LMS: Remortgage lending up almost 30% year-on-year

Remortagers releasing more cash in the lead up to Christmas 

  • October remortgage lending rose to £4.73bn, up 0.6% on September’s £4.70bn. October’s figure is also 27.7% higher than this time last year.
  • Total gross mortgage lending rose to £17.6bn; remortgaging now accounts for 27% of the total market.
  • Those remortgaging are each taking out an average of £21,579 in extra equity (above the value of the redeeming loan). This implies a total amount of equity withdrawn by remortgaging in October to be £683.2m.
  • Remortgagers are releasing an additional £8,578, when compared to January (£13,001).

LMS figures reveal that monthly gross remortgage lending increased by £26m in October to £4.73bn. This is up 0.6% on September’s £4.70bn reported by the Council for Mortgage Lenders (CML) last week, and 27.7% higher than this time last year.

The CML has also reported that total gross mortgage lending rose to £17.6bn in October. As a result, remortgages now represent 27% of the total market.

LMS estimates that the total number of remortgage loans in October decreased by 3.8% to 31,661, compared with 32,900 in September. However, despite this, October’s figure is still 8.8% higher than this time last year (29,100).

The average remortgage loan amount has also dropped slightly (by 1.4%) over the past month and now stands at £149,282. But this figure is also 8.0% higher than this time last year.

Commenting on the latest figures, Andy Knee, Chief Executive of LMS says:

“While the growth in the value of remortgaging has slowed over the past month, it remains at a very high level compared with a year ago.

“Remortgage lending is up by nearly 30% compared to this time last year, and remortgage customers are releasing more than £8,000 more cash than they were in January.

“According to a recent LMS survey approximately 18% of the £21,579 average equity released last month will go into home improvements, 11% on the repayment of debt and the remaining 71% will finance extra spending, most probably ahead of Christmas*.

“There are some fantastic deals to be had at the moment. In fact, our latest customer survey showed that 39% were able to reduce their monthly repayments, some by as much as £500*.

“We are likely to see this buoyancy in the market continue over the coming months as lenders try to feed transactions through the pipeline ahead of the implementation of the MMR in April. While harsh weather may temper the growth in the house purchase market, remortgage activity in the coming winter months is likely to prove much more resilient.”

LMS: Remortgage sector counters wider market trends, jumping 10% in September


Average remortgage loan amount at record high 

  • September remortgage lending rose to £3.9bn, up 10.4% on August’s £3.5bn. September’s figure is also 20.8% higher than this time last year.
  • Total gross mortgage lending fell slightly to £16.2bn; remortgaging now accounts for nearly a quarter (24%) of the total market.
  • Those remortgaging are each taking out an average of £21,339 in extra equity (above the value of the redeeming loan). This implies a total amount of equity withdrawn by remortgaging in September to be £544.5m.

LMS figures reveal that monthly gross remortgage lending increased by £364m in September to £3.9bn. This is up 10.4% on August’s £3.5bn reported by the Council for Mortgage Lenders (CML) last week, and 20.8% than this time last year.

The CML has also reported that total gross mortgage lending fell slightly to £16.2bn in September. As a result, remortgages now represent nearly a quarter (24%) of the market.

LMS estimates that the total number of remortgage loans in September increased by just 1.7% to 25,515, compared with 25,000 in August. This figure is also 5.4% higher than this time last year (24,200).

The average remortgage loan amount has also risen by 1.4% over the past month and now stands at £151,428. This figure is also 10.2% higher than this time last year.

Commenting on the latest figures, Andy Knee, Chief Executive of LMS says:

“Following a slight knock in August, the remortgage sector appears to have leapt back on its feet – with remortgage lending growing by more than 10% during September. The market as a whole has been contracting slightly over the past three months, and as a result remortgages now account for a larger proportion of the market.

“The average remortgage loan amount is currently the highest it has ever been, according to our records which date back to 2005. This is indicative of the steady upward trend in the average house price that we have been witnessing in recent months.

“There are some fantastic deals out there, and as you can see even those with an existing mortgage are able to take advantage.”

LMS: August remortgage lending up year-on-year

Customers released £27.1m more cash from remortgaging than in August 2012

  • August remortgage lending fell to £3.2bn, down 14.8% on July’s £3.8bn. However, August’s figure is still 8% higher than this time last year.
  • Total gross mortgage lending has remained stable at £16.6bn; remortgaging now accounts for a fifth (20%) of the total market.
  • Those remortgaging are each taking out an average of £20,070 in extra equity (above the value of the redeeming loan). This implies a total amount of equity withdrawn by remortgaging in August to be £435.2m. In August 2012, customers withdrew a total of £408.1m – which means that customers this year are releasing £27.1m more.

LMS figures reveal that monthly gross remortgage lending decreased by £561m in August to £3.2bn. Although this is down 14.8% on July’s £3.8bn reported by the Council for Mortgage Lenders (CML) last week, it is 8.0% higher than this time last year.

The CML has also reported that total gross mortgage lending held steady at £16.6bn in August. As a result, remortgages now represent a fifth (20%) of the market.

LMS estimates that the total number of remortgage loans in August decreased by 19.7% to 21,682, compared with 27,000 in July. This figure is also down 4.5% on this time last year (22,700).

The average remortgage loan amount, however, has risen by 2.4% over the past month and now stands at £149,367. This figure is also 10.3% higher than this time last year.

Commenting on the latest figures, Andy Knee, Chief Executive of LMS says:

“Although remortgage lending has experienced a noticeable knock in August there is no need to be despondent as the figures compare favourably year-on-year.

“We all knew that recovery following the downturn in 2008 was going to be a long and bumpy road, so when presented with a fall such as this, it is always best to take a step back and consider them in terms of the bigger picture.

“It would appear that the entire market has reached a plateau in August, with the CML reporting that gross mortgage lending has held steady at £16.6bn. The remortgage market’s contraction means that remortgages only represented a fifth of the market in August, but we will no doubt see further reshuffles in the months to come.”

LMS: Remortgage lending jumps 13% in July

The highest July figure since 2008 

  • July remortgage lending rose to £4.2bn, up 12.7% on June’s 3.7bn. This is the highest gross remortgage lending figure for this time of year since 2008.
  • Total gross mortgage lending has risen 11.9% to £16.6bn; remortgaging now accounts for a quarter (25%) of the total market.
  • Those remortgaging are each taking out an average of £20,425 in extra equity (above the value of the redeeming loan). Although this is 9.7% lower than in June (£22,615), the total amount of equity withdrawn by remortgaging in July (£584.0m) was the largest figure since May 2012.

LMS figures reveal that monthly gross remortgage lending increased by £471m in July to £4.2bn. This is not only up 12.7% on June’s £3.7bn reported by the Council for Mortgage Lenders (CML) last week, but is also the highest July figure since 2008.

The CML has also reported that total gross mortgage lending rose 11.9% in July to £16.6bn, from £14.8bn in June. As a result, remortgages now represent a quarter (25%) of the market.

LMS estimates that the total number of remortgage loans in July increased by 6.7% to 28,590, compared with 26,800 in June. This figure is also up 13.9% on this time last year (25,100).

The average remortgage loan amount has fallen by 2.4% over the past month and now stands at £145,887. However, this figure is 11.0% higher than this time last year.

Commenting on the latest figures, Andy Knee, Chief Executive of LMS says:

“Following subdued remortgage activity in June this month’s figures show a significant boost, with both gross remortgage lending and the number of remortgages both increasing significantly. In fact, the total remortgage lending figure marks the most successful July we have seen since 2008.

“The average amount of equity being released has fallen this month from its 13-month high in June but due to the increase in the number of customers, the total amount of equity being released by remortgaging is continuing to grow month by month.

“Despite Carney’s tying of an increase in interest rates to unemployment figures, more than one in seven (14%)* of our customers in July said they believed rates were going to rise. It is a good idea to take advantage of these deals whilst they are still around.”

LMS: Remortgagers releasing record amounts of equity in June

A fifth remortgaged to fund home improvements

  • June remortgage lending fell to £3.5bn, down 11.7% on May’s £3.9bn; however, the average remortgage loan amount is the highest it has ever been (£149,514).
  • Total gross mortgage lending has risen 2.0% to £15.0bn; remortgaging now accounts for 23% of the total market.
  • Those remortgaging are each taking out an average of £22,615 in extra equity (above the value of the redeeming loan) – the highest amount per individual since January 2012.
  • This implies a total of £527.3m equity withdrawal by remortgaging in June – the largest total amount of equity being released from remortgaging for over one year (since May 2012).

LMS figures reveal that monthly gross remortgage lending decreased by £462m in June to £3.5bn. This is down 11.7% on May’s £3.9bn reported by the Council for Mortgage Lenders (CML) last week.

The CML has also reported that total gross mortgage lending rose 2.0% in June to £15.0bn, from £14.7bn in May. As a result, remortgages now represent 23% of the market.

LMS estimates that the total number of remortgage loans in June decreased by 13.9% to 23,316 compared with 27,087 in May. This figure is also down 2.1% on this time last year.

The average remortgage loan amount has risen by 2.6% over the past month and now stands at £149,514. This is the highest figure LMS has on record.

Commenting on the latest figures, Andy Knee, Chief Executive of LMS says:

“Both the value of remortgage lending and the number of remortgagers fell for the first time since the beginning of the year in June. In contrast, gross mortgage lending continued to rise and as a result, remortgaging accounted for under a quarter (23%) of all transactions.

“However, remortgage customers were taking out a record amount of equity – the highest amount since January 2012. A fifth (20%) said they did so to fund home improvements, whilst a further 9% used the additional funds to pay off debts.

“With Mark Carney confirming that interest rates will not be rising for the time being, others who are considering remortgaging would do well to take advantage of the current deals, as there will be an avalanche of remortgage activity once interest rates do eventually increase.”