Remortgage instructions fell by 13% in October as borrowers opted for product transfers amid the ongoing cost-of-living crisis, according to LMS.
Completed remortgages were down 12% last month and the pipeline for this type of home loan was 9% lower, data from the conveyancing services firm’s latest monthly snapshot shows.
Overall cancellation rates rose by 0.9% to 7.7%, while the average monthly payment increase for those who remortgaged last month was £187.72.
The average remortgage loan amount in London and the South East was £356,195, while the average for the rest of the UK stood at £200,913.
LMS chief executive Nick Chadbourne says: “October has seen an ongoing fall in remortgage activity – instructions fell, cancellations increased and while the pipeline only dropped slightly, this is because completions also decreased – that is to say, there has been a fall in the number of cases successfully progressing to the end of the process.
“This was entirely expected. While interest rates have stabilised for now, they remain high and unlikely to drop until late 2024, and, in the current cost of living crisis, borrowers are understandably avoiding the need to undergo affordability tests by opting for product transfers instead.
Chadbourne adds: “This is predicted to remain the case in November and throughout the fourth quarter of the year.
“There are almost a million products maturing this side of Christmas, but we expect the vast majority of these to opt for product transfers while those who need to remortgage will continue to favour two-year fixes as they have done this month in the hope that rates fall by 2025.”
