Remortgage lending demand has remained weak even though homeowners have the opportunity to secure long term cheap remortgage deals. Lenders have been fighting in a competitive mode for the attention of borrowers and that has led to some of the lowest interest rates associated with remortgages and mortgages ever. Yet, homeowners are holding back and could be missing a chance at a fixed term low interest deal.

According to LMS, remortgage lending fell to the lowest level in the past two years during March. Gross remortgage lending reached £3.3 billion which is the lowest level since March 2013. Remortgage overall has fallen by 6% with the average remortgage totaling £147,484 and that is the lowest average value since July 2013.

The amount of equity released from property declined to 19% in a month to month comparison of February to March. There was a slight increase in the volume of remortgages by 4% to 22,340, but that level is 11% below March 2014.

LMS chief executive Andy Knee remarked, “Despite a recent boost to mortgage lending as we head into summer, remortgage figures remain lower than last year, prolonged by the uncertainty of a looming election.

“At a time when interest rates and offers are at a record low, it is surprising to see that borrowers are remortgaging less often and are failing to capitalise on these offers. Stricter lending criteria and uncertainty around the election may be dissuading people from remortgaging more frequently.

“This is something parties should bear in mind: supply remains the major chink in the housing market armour and urgently needs addressing before a sustainable market can flourish.”