Remortgaging was responsible for a record proportion of valuations in August, according to the latest research from Connells Survey & Valuation.
“Remortgaging is quickly becoming the dominant activity in the lending market,” commented John Bagshaw, corporate services director of Connells Survey & Valuation. “The record high in August was driven by consumers seeking out better value borrowing. Having benefited from a decade of low interest rates, consumers are sensing the risk that this era is nearing an end. Many older mortgage deals are expiring this autumn which will mean moving onto more expensive standard variable rates. As a result, homeowners on these deals are opting to refinance, taking advantage of the intense competition in the mortgage market right now.”
According to Connells, the proportion of remortgage valuations has risen three percentage points year-on- year to make up 37% of the entire market.
The growth in remortgaging, including buy-to- let remortgaging has been driven by high levels of competition from lenders who are reducing their rates to attract potential borrowers. Consumers are opting to lock in these lower rates, securing long-term, fixed-rate remortgages ahead of a potential base rate rise later in the year.
“Despite a slight slowdown in transactions this August, official figures suggest house price growth has held up,” continued Bagshaw. “This rise in property prices means homeowners could now get a better loan-to- value ratio when remortgaging than when they first borrowed – potentially allowing them to lower monthly repayments. With so much economic uncertainty and hints of a base rate rise, many are choosing to lock into a lower rate to see them through the next few years.”