Remortgage completions down 31% in February: LMS

Remortgage instructions increased by 9% in February, but completions fell by 31% and pipeline cases decreased by 2% month-on-month, according to the latest data from LMS.

The average monthly payment increase for those who remortgaged in February was £257.

70% of borrowers increased their loan size in February and 54% took out a five-year fixed rate product.

30% said their main aim when remortgaging was to gain longer term security, the most popular response.

Nick Chadbourne, CEO at LMS, commented: “Instructions continued to rise in February as expected as people looked to lock in rates before they rise again – this is to be expected since we have seen swap rates bottom out, and the majority of borrowers continued to go after five-year fixed rates in a push for longer term security.

"Despite this, the pipeline contracted as a result of a simultaneous increase in cancellation rates – this was predictable, though, as people who secured rates in December started cancelling and reapplying for more attractive rates.

"Heading into March, we are likely to see an uplift in instructions thanks to the ERC spike expected at the end of the quarter. This will be tempered a little as affordability remains a challenge, and with the Spring Budget doing nothing to help the housing market this will be unlikely to go away anytime soon. What we needed was measures to help people get on the property ladder, with the government taking steps to increase housing stock and therefore improve affordability, and to make the long-term rental market more stable by easing punitive measures on landlords, but we didn’t see any of that. Hopefully there will be more input in the coming months, but until then we are likely seeing reduced activity overall as people effectively wait and see before making any decisions.”