The low interest rates and continued abundance of remortgage products on the market from lenders had failed until recently to move demand higher.  While mortgage lending was increasing in other areas including for first time home buyers, remortgaging remained in weak demand.  However, in January gross remortgage lending for the month increased by 6% according to the LMS Remortgage Report.  Remortgages increased to a gross value of £2.9 billion in January over the £2.7 billion recorded in December.

Remortgage lending accounted for 28% of the gross mortgage lending in January.  This is the highest proportion recorded since October 2012.  The average remortgaged loan value increased to £141,548 from £140,553.  The quantity of remortgage loans in January increased by 5.5% from 19,279 recorded in December to 20,332.  The average loan to value of remortgages remained relatively steady from the same level recorded in December at 56%.

January also recorded a decline in overall total gross mortgage lending.  The value for gross mortgage lending was £10.4 billion which was down £1 from the December value of £11.4 billion.

LMS chief executive Andy Knee remarked on the January figures, saying, “Seasonal factors and bad weather in December had a severe impact on purchase lending in January but the same cannot be said about remortgaging.

“The remortgage market has resisted a normal seasonal downturn, reaping the benefits of competitive rates which are now available because of the Government’s Funding for Lending Scheme.

“We expect this growth to continue into February and March.”