The latest LMS Remortgage Report has offered an estimate of an increase in July of 13% for remortgage lending.  July remortgaging increased to £3.5 billion from the June level of £3.1 billion.  The increase is a measurable amount but is still less than the £4 billion in remortgage lending reported last year.  Remortgage lending also represents less than the total percentage of mortgage lending when compared to last year.  For July remortgaging was 25% of all gross mortgage lending which is less than the 32% of gross mortgaging seen for the same month last year.

Andy Knee, LMS chief executive, remarked, “The good news is that better deals have materialised. Lenders have recently launched a number of sub-3 per cent rates with terms of four or five years. This has led to a real surge in remortgage applications in late July that has continued into August. We had been expecting this to be a disappointing time with the distraction of the Olympics but the reverse has happened.

“These applications should become completions in late August and September and suggest that we will see a sharp rise in remortgage lending later in the year.”

The Council for Mortgage Lenders (CML) believes that the competitive market that has emerged will bring better deals from lenders and more interest from borrowers.  A spokeswoman for the CML said, “We have seen movement from some lenders on SVRs and new business pricing and that will be a motivator for those borrowers who are not sitting on such great deals or who are more risk adverse.

“People on very low interest-only rates may still adopt a wait and see attitude which may have even increased in the wake of eurozone wobbles as they believe policy rates will stay lower for longer.”